El Sur
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

South American Politics and Government

Thursday, January 31, 2002
Columbia
Gunman Shoots Colombian Paper Editor: Yes, there's no suspect yet. But is it any wonder the Columbian public wants a tougher approach to the narco-guerillas, as recent polls suggest. See yesterdays post about the latest poll on Columbia's May presidential election.


posted by Richard 5:38 PM
. . .
Argentina
Duhalde Panders I: Any public official who may be subjected to an election has to pay attention to the people. Eduardo Duhalde, the current, appointed President of Argentina, who, it must be said, disclaims any interest in running for election when his term expires in 2003, has the additional burden of 50 years of right-wing populist pandering, handed down from Juan Peron, founder and namesake of his political party. But, there is a difference between responding to the hopes and fears of a people in a crisis, while seeking their long-term interest, on the one hand, and pandering to their worst, most selfish prejudices and short-sighted demands, on the other. That difference is leadership. Two recent panders from a radio interview, as quoted in La Nacion:
"He confirmed moreover that he views 'sympathetically' the spontaneous demonstrations of the people and considered that they express 'movements of an Argentina that lives and is not resigned to death.'"
"Ratificó además que ve "con simpatía" las manifestaciones espontáneas de la gente que, consideró, expresan "movimientos de esta Argentina que está viva y no se resigna a morir."
"On another matter, the chief executive pronounced himself in favor of establishing the penalty of 'perpetual imprisonment' for those responsible for corrupt acts 'that affect the interests of the fatherland and the people.'
"Por otro lado, el primer mandatario se pronunció a favor de establecer la pena de 'prisión perpetua' para los responsables de actos de corrupción 'que afecten los intereses de la patria y el pueblo.'"


posted by Richard 12:00 PM
. . .
Argentina
By-the-way advice from Donald Lambro, in The Washington Times:
"But Enron's demise is yet another example of how our economy unceremoniously gets rid of unproductive companies to make room for new venture capital businesses."
"What happened to Enron is the way capitalism works. It levels the big, the small and the in-between and it does not care how politically well-connected you are. It is the reason we are the largest and most prosperous economy on Earth. And why other economies, such as Argentina, for instance, would do well to copy our model."


posted by Richard 7:02 AM
. . .
Argentina
This morning's Wall Street Journal has a front page story (no link) describing efforts by Israel to encourage Argentine Jews to immigrate. They've had some success, though Palestinian violence remains a deterrant.

Of special note is what the article reveals of the toll on the middle class brought about by years of incompetent and corrupt government, as seen through the life of the Kuperman family. As the current recession began:
In 1997, the Kupermans couldn't pay their car loan and finally had to sell the vehicle at a big loss. Desparate to keep the family business afloat, they sought out bank loans using the family's gold necklaces, chains and bracelets as collateral. Finally, in Septemter 2000, the had no choice but to sell their (optician) shop.
Most of the $115,000 they got went to settling debts. They invested another $40,000 of the proceeds...in an aluminum workshop started by Mrs. Kuperman's brother, but it flopped.
One daughter soon had to quit college. Another had to leave private high school.
Then came the devaluation of the peso...The Kupermans' apartment is now worth about one-quarter of its $80,000 value two months ago. They have grown accustomed to a new sight--disheveled women and children begging for food on street corners; people rummaging through trash. Meanwhile, they watched on television as 'one delinquent after another' took the presidential oath, Mrs. Kuperman says.
The Kupermans have decided to risk immigration to Israel, The Journal says, providing they can find a buyer for their apartment.


posted by Richard 6:42 AM
. . .
Wednesday, January 30, 2002
Argentina
More on Argentina's new banking legislation: Even as Argentine officials meet with the IMF, the country's legislature continued to press ahead with legislation that would prevent companies paying foreign debts without central permission. But, that's not all it would do, according to
Reuters.
"Some fear the bankruptcy bill, which IMF chief Horst Koehler has said is a bad decision and should be avoided, could prompt a tidal wave of private debt defaults."
"The bill...suspends creditor action for 180 days and also gives banks 90 days to renegotiate debts they hold before having to write them off as a loss...."
"Javier Finkman, chief economist in Argentina for HSBC, said such a bill 'practically suspends creditor rights and takes away any incentive for future credit. It seems to me it seriously compromises Argentina's ability to grow in the medium term, let alone the short term.'"
Laws that make it impossible to collect debts make it impossible to extend loans. The ignorance of Argentine politicians of such elemental facts of life never ceases to amaze.

posted by Richard 6:31 PM
. . .
Columbia
The
Hard-Line Colombian Candidate Leads, reports Yahoo News today, in a story about new polling data on the presidential election to be held in May in the guerilla-plagued country. Alvaro Uribe, a 48-year old independent and former governor, led the field with 40 per cent in a Gallup poll, up from third place with 22 per cent last month. Horacio Serpa, a former Interior Minister, dropped out of first place for the first time with 31 per cent in the Gallup Poll.

How can this be? Don't these people know that war isn't healthy for children and other living things. Well maybe it's this article Car Bombs Leave Six Dead today, and this article Seven Columbian Soldiers Killed yesterday.
"People believe Pastrana has given too many concessions, and they also see that the army is growing stronger and becoming more capable of confronting the guerrillas," said Jorge Londono, president of Gallup Colombia.
The upsurge in violence began after the FARC and the government signed an accord they said salvaged the peace process and paved the way for a possible cease-fire by April.
Uribe was the only major candidate who criticized the agreement, calling it vague and demanding more tangible results.
"We can't keep going with this government that cares only about the periods and commas in its agreements with the guerrillas, but turns its back on this serious terrorist threat," Uribe said Wednesday.


posted by Richard 5:33 PM
. . .
Argentina
There's more on the case of Carlos Rohm, the banker detained last week for taking money out of the country illegally
El Sur, Jan. 27. According to Telam.com, the judge in the case, María Servini de Cubría, learned that Rohm defrauded the bank of 260 million pesos. The allegation here is real theft, not capital flight. Still, the judge continues investigating that too.

posted by Richard 12:29 PM
. . .
Is Duhalde deluded II? A story in Yahoo News Bush Pushes Argentina on Economy highlights the seemingly vast differences between U.S. and Argentine officials on the imminence of aid.
"The Bush administration is supporting the position of the IMF that Duhalde's government must adopt a more credible currency regime, scrap controls on bank withdrawals, come up with an acceptable plan to restructure foreign debt and deal with soaring budget deficits."
"While those demands represent sizable hurdles the country must clear before receiving new IMF support, Diego Guelar, Argentina's ambassador designate to the United States, expressed confidence that negotiations on new loans will begin next month."
"Guelar told an audience at the Center for Strategic Studies, a Washington think tank, that Argentine officials hoped to negotiate for $15 billion to $20 billion in new international loans in February."
"He said that Economy Minister Jorge Remes Lenicov expected to arrive in Washington around Feb. 11 to negotiate for the new loans after the government wins legislative passage of its key fiscal reform proposals."
Argentine officialdom's optimism does play well at home in a country that is desparate for help.

posted by Richard 8:23 AM
. . .
Argentina
The country's biggest, most populist state defaults on state debt, Argentine newspapers including
La Nacion, report. The state's most recent governor, who ran up most of this debt spending on populist programs, is the current foreign minister and international supplicant Carlos Ruckauf, in Italy today after meeting with Secretary of State Powell and Tresury Secretary O'Neil in Washington yesterday. For their part, U.S. officials appear still to be insisting on a plan that is "credible and sustainable." La Nacion's report is here.

posted by Richard 8:06 AM
. . .
Is Duhalde deluded? While the Argentine government considers legislation to conserve foreign exchange by banning companies from paying their foreign debts, thus forcing many into bankruptcy, The Wall Street Journal (today's international section, no link) reports, the Argentine papers report that Duhalde is reacts to demonstrations by promising 1-million new jobs (La Razón). Why?
"If I wasn't President at this time, I would be on picket line or a (pot-beating) demonstration."
"Si no fuera Presidente tal vez estaría en un piquete o con una cacerola."
With the one action he will destroy economically productive enterprises; with the other he will produce make-work (if anyone is even required to show up). This is not a credible and sustainable plan.

posted by Richard 7:29 AM
. . .
Tuesday, January 29, 2002
Mexico
The National Action Party (PAN) government of Mexico is going to try to revise a land policy that goes back to the Mexican Revolution of 1910-1917. PAN President Vicente Fox wants to move from a policy emphasizing distribution, often to peasant collectives, to a policy emphasizing titling property, according to a story from Yahoo News,
Mexico Unveils Farm Policy.
"After landless peons rose up in arms in the Revolution, the new government rewarded them with small, often communal farms scattered like a patchwork over much of Mexico. Many of the farms were barely viable, and the same land was often handed out twice, creating community conflicts that persist to this day."
Fox said that only about half of Mexico's approximately 250 million acres of rural properties had clear titles, a situation that has led to land disputes and difficulties for farmers in getting production loans. "This will allow us certainty and confidence in planning our production, and allow us to give our children a secure future when they legally inherit the land," Fox said.
One of the greatest hindrances to development throughout Latin America is the lack of clear title to rural land. Lacking clear title, farmers find it difficult (and often risky) to improve the land they farm. It is equally difficult to cash out. Fox will likely have to fight to implement his program. The "land reform" he is trying to reform is supported by deep feelings of rural nostalgia and revolutionary romance.

posted by Richard 6:36 PM
. . .
Argentina
Argentina Should Be Crying About Itself says
Newsday.

Ignore the hackneyed headline. This much needed tough love. It should be translated into Spanish and handed to Carlos Ruckauf (Argentina's foreign minister, currently visiting Washington, seeking help) before he heads back to Buenos Aires.
Excerpts:
Argentina's history reads like a puritan tract on the folly of letting easy money go to one's head. A hundred years ago, its grasslands made it wealthy. Even today, politicians and labor bosses say Argentina "is a rich country," brushing aside the fact that the farming economy that did so well in 1900 is not much use in 2002 when innovative export industries are essential. If Argentina has a national ethos, it has to do with spending money lavishly, not with creating wealth.
But the idea that Argentina is "a rich country" sitting on a treasure chest that need only be unlocked by a leader who loves the people, somebody like Juan Domingo Perón, has proved fatal. It has encouraged corruption on a stupendous scale as well as runaway inflation first and then, when the peso was pegged to the dollar, a reliance on credit. Why worry if you think you are heir to a fortune?
As "downsizing" the middle class by confiscating its savings and depriving it of opportunities is a cruel business, it is not surprising that the queues outside the Spanish, Italian and U.S. consulates stretch for miles and those who have no hope of getting out are taking to the streets - banging pots and pans, trashing banks and screaming abuse at the politicians they voted into power but who have proved utterly incapable of providing the clear-sighted, honest leadership their country so desperately needs.


posted by Richard 10:12 AM
. . .
Argentina
The
Financial Times publishes a wonderfully clear and brief analysis of Duhalde's record and on-going dilemmas.

posted by Richard 10:10 AM
. . .
Monday, January 28, 2002
Argentina
A simple answer for Argentina? That's the question Sebastian Edwards asked in last Friday's "The Americas" column in The Wall Street Journal. (I held this waiting for online publication and a link that never came.) Edwards' answer: Follow Chile's example. Not, it must be said, in a military overthrow of the (non-elected) civilian government. Rather, Edwards focuses on 1982, nearly 10 years after Augusto Pinochet's coup against Salvador Allende, when, he says
"Chile faced a crisis hauntingly similar to Argentina's today. The peso, which for several years had been pegged to the dollar under an implicit currency-board arrangement, was devalued by 78%....
When the Chilean economy collapsed in 1982, many observers blamed the reforms and claimed that a free-market system could not be implemented in a small developing country. In Chile then--as in Argentina now--the post-crisis reaction was to flirt with populism....The results were dismal."
Then, in 1985, the military government appointed Hernan Buchi finance minister. He restructed debt, deepened market reforms, reduced government spending, and cut taxes, leading 12% annual investment growth between 1985 and 1988 and gross domestic product growth of 7.3 per cent over the next four years, while unemployment declined to 6%.

Most surprisingly, Edwards disagrees with the view that, because Chile reformed its economy under the guidance of a military government, its model is not applicable to Argentina.
"The fact that an authoritarian government does not face elections does not mean that economic reformers have a free hand within a dictatorship. Reformers have to convince the military--which usually have nationalistic, state-centered views--that their policies are appropriate. Dictators also demand results....

The democratic structure in Argentina makes the need for bold reform even more urgent. A leader willing to confront special interests would be rewarded with growth and enormous popularity. Without growth it's hard to see how Mr. Duhalde can survive."

It is important to remember, as Argentina's leaders and public alike argue that the country is a powerless victim of world markets, that the refutation of their argument exists across the Andes.


posted by Richard 12:45 PM
. . .
Argentina
Despite the government's promises and a crackdown on violent protests over the weekend, protests continue.
La Nacion describes one demonstration involving, among others, the Corriente Clasista Combativa (something like Militant Class Tendency), and demanding the immediate creation of a million of jobs and an increase in the minimum wage ("el cumplimiento en forma inmediata del millón de puestos de trabajo y el aumento del salario mínimo.") Hey, why not?

posted by Richard 10:15 AM
. . .
Argentina
The government promises economic announcements on Saturday, according to
La Nacion. One measure will include a promise to return all funds frozen in bank accounts by 2005. That should make savers happy! Another is the 2002 budget. Dates to announce both of these measures have been announced before.

posted by Richard 10:08 AM
. . .
Argentina
Argentina's Christmas president, Adolfo Rodriguez Saa, installed on December 21 and ousted a week later, when the Peronist governors of Buenos Aires and other big states, refused to pledge support, accused Duhalde and his associates of "reintroducing a corrupt administration to the country," according to
El Pais.


posted by Richard 10:00 AM
. . .
Sunday, January 27, 2002
Argentina
The joint project of the left and the Duhalde government to establish individual malfactors as the cause of capital flight last year, rather than the rational choices of even moderately attentive local investors, has claimed a victim, as detailed in
Pagina12/WEB, a leftist paper that has taken the lead in promoting this notion. Obviously there could be individuals or institutions that acted on inside information in the days immediately preceding the Dec. 3, 2001 corralito. Time will tell whether Carlos Rohm, the still-detained vice president of the Banco General de Negocios, is one of them. Whether he and/or the bank (partly owned by J.P. Morgan) are guilty, plenty of people were carrying their cash to Montevideo, Madrid and Miami well before bank accounts were frozen, as the previous post shows.




posted by Richard 6:59 PM
. . .
Argentina
Last week, acting on the orders of a judge, (responding to a complaint from leftist deputies),police raided and searched banks, exchange houses, airports, train stations and more, seeking evidence of capital flight in the weeks leading up to the corralito that froze bank accounts in place.
Graphs in La Nacion today indicate that there was indeed capital flight, but that it occurred over the course of the year. So, instead of operating on leaked information, as was charged, it seems that eople removed their money from the country in response to an obviously deteriorating situation.

posted by Richard 6:17 PM
. . .
Argentina
Duhalde and his Peronist associates no doubt thought they were succeeding to positions of power and honor when they took over upon Fernando de la Rua's resignation in December, in the wake of popular demonstrations, demonstrations many believe they helped engineer. A Chilean paper,
Diario Las Últimas Noticias, quoting a spokesman for a leader of de la Rua's Radicals, now in opposition, shows just how little public officials are honored on Argentina today:
"Accused by critics, insulted and attacked every time very aggressively, many of them opt to 'disappear' from the scene and limit their public acts, while the Argentine nation increases the discredit in which it holds the political class."
"Acosados por críticas, insultos y ataques cada vez más agresivos, muchos de ellos optaron por 'desaparecer' de la escena y limitar sus actos públicos, mientras en la nación argentina crece el descrédito hacia la clase política."

Increasingly, Latin Americans are insisting of performance from their leaders.


posted by Richard 5:36 PM
. . .
Venezuela

Will Chavez Strike Out?, asks the
World Press Review, a little more than a month after a one-day joint labor, business work action shut down 90 per cent of Venezuela's business.

Author Robert Taylor notes that precipitating event was Venezuelan President Hugo Chávez's
"unilateral decision to exercise extraordinary decree powers to implement a package of 47 laws without congressional review or approval, including a controversial land reform that authorizes the government to determine whether private landowners are keeping their property in productive use."

This has eroded business confidence, discouraged investment and raised the spectre of dictatorship. Chavez's policies have little support outside of the poorest sectors and Chavez's own military. But Taylor doesn't seem to think the opposition is much better. Letting Domingo Alberto Rangel speak for him:
"Lamentably, since [the country's founder Simón] Bolívar died, the so-called republican alternation of power has amounted to the rotation of rascals in ransacking the budget. Civilians and military alike have succumbed to this weakness...."

Using Rangel, Taylor is too negative. The work stoppage was peaceful, as have been subsequent demonstrations. Congress, in the hands of Chavez's political movement, has become a bit more concialatory (though Chavez himself hasn't). Most important, his popularity has peaked; he has nowhere to go but down. If the military does come in it will be to prop him up in failure, not as authoritarian alternative that must be gone past, before democratic government can return.

It is at least as accurate to suggest that recent events in Venezuela reveal another maturing Latin American society.

posted by Richard 4:39 PM
. . .
La Nacion, Buenos Aires, notes the large projected fall in gross national product for 2002:
"El Gobierno calcula que el Producto Bruto Interno (PBI) de este año bajará cerca del 5 por ciento, una variación que las autoridades calificaron hoy de 'muy negativa, pero realista.'"


posted by Richard 1:05 PM
. . .
The government is on a razor's edge, between the IMF and an angry public," says Carlos Ruckauf, Argintina's highest economic official.

posted by Richard 11:20 AM
. . .
Miami Herald: Bush getting it right in Latin America so far

posted by Richard 7:03 AM
. . .
Miami Herald: Bush getting it right in Latin America so far

posted by Richard 6:59 AM
. . .
Saturday, January 26, 2002
Boston Globe Online / Editorials | Opinions / No need to cry for Argentina

posted by Richard 6:58 AM
. . .
Argentina News

Demonstrations against the bank account freeze (corralito), supreme court and political leaders took place in hundreds of cities last night. There was a large demonstration in the Plaza del Mayo, in almost every Buenos Aires neighborhood and in hundreds of cities around the country, according to Clarin and La Nacion. The demonstrations were mostly peaceful, until the early morning after the majority of the demonstrators went home, there were incidents of violence around the Congress in Buenos Aires leading to about 30 arrests.

"Hace más de una década el clamor era por el resguardo de la democracia. Hoy lo es por el respeto de los derechos ciudadanos y por el imperio de La ciudadanía defendió sus derechostitución, que protege la propiedad privada," said a commentator in La Nacion.
La Nacion On-Line



Projections from the government and the International Monetary Fund (IMF) released estimates of the country's gross domestic product for the coming year ahead of submission of a national budget. Though they disagree on the amount, both project a substantial decline in GDP, 4.9 % for the government, around 7% for the fund. Both are very large amount.





posted by Richard 5:12 AM
. . .
LA NACION LINE

posted by Richard 5:12 AM
. . .
Friday, January 25, 2002

BLOGGER -
Télam - Agencia Nacional de noticias de la República Argentina


posted by Richard 7:23 PM
. . .
http://www.telam.com.ar/index2.htm
Télam - Agencia Nacional de noticias de la República Argentina


posted by Richard 7:21 PM
. . .
http://www.telam.com.ar/noti01.htm

posted by Richard 7:19 PM
. . .
http://www.telam.com.ar/noti01.htm

posted by Richard 7:17 PM
. . .
BLOGGER - How to create a BlogThis! bookmarklet

posted by Richard 6:45 PM
. . .
Argentina News

Big demonstrations around the country. Thousands in the Plaza del Mayo in front of the national government house. Ten thousand, many tourists, at the Mar de la Plata resort. http://www.telam.com.ar/index2.htm


posted by Richard 5:56 PM
. . .
Argentina News

Not only here is the Duhalde government's longevity in question. Yesterday (Jan. 24), The Wall Street Journal wondered why "the country's most popular politician, Elisa Carrio, remains uncharacteristically quiet."
"Ms. Carrio gives Mr. Duhalde, selected by the congress, and his Peronist Party loyalists about a month to stabilize a bankrupt economy, stave off an irate populace and cut an assistance deal with the International Monetary Fund. If he doesn't pull off this hat trick, she predicts, Argentina will have to hold snap elections. And she will be ready to make her move."
Carrio has an approval rating of 44 per cent, highest of 21 leading politicians. Her likely opponent, the Peronist governor of Cordoba province, Jose Manuel de la Sota, 28 per cent.
Carrio is a leftist, who made her name battling "crony capitalism" and corruption, and wants the election to be a referendum on free-market policies and trade liberalization.
If her strategic analysis is right and she succeeds Duhalde, Argentina will move further into the realms of populism and the politics of confiscation. The policies this implies are just distilled Peronism and can't work.


posted by Richard 8:51 AM
. . .
Thursday, January 24, 2002
Argentina News

The Duhalde government's worst on-going, day-to-day problem remains all that money frozen in bank accounts, especially dollar denominated accounts. Money tied up in frozen accounts can't be spent. Thus, the corralito reduces the money supply and delays economic recovery. Nothing irritates the middle class more than seeing their money locked up indefinitely and sure to be returned short. So the government daily promises relaxations of restrictions, leading to eventual return. Today, the government announced exceptions to withdrawl restrictions for the very old and the sick. The Chamber of Deputies also authorized an investigation of capital flight, alleged to have occurred in the days preceeding the imposition of the bank account freeze on December 3. Last week, on the complaint of some left-wing deputies, a judge authorized searches of banks, exchange houses, airports, train and bus stations and highway toll booths (seeking film of cash-filled trucks heading for the border). A report is due in 20 days.
For all the activity, the public remains unpacified. Demonstrations occur daily. Last night, the home of a Peronist legislator in Junin section of Buenes Aires was torched. At least one bank was the scene of a peaceful sit-in, when it was unable to return customers money as per the most recent decree. This wouldn't happen if the government paid more attention to the practical problems of implementing its directives and gave adequate notice of them.
Also, the IMF's representative on the scene repeated that $15 billion assistance, which the government is asking is too much, and reiterated that the government needs a credible and sustainable plan before any aid is forthcoming. As it does ending the bank account freeze, the government continues to promise such a plan. The question is: Will public patience last long enough for Duhalde to implement an aidable plan?



posted by Richard 12:32 PM
. . .
Wednesday, January 23, 2002
Argentina

The peso was decoupled from the dollar last week at the official rate of 1.4 pesos to a dollar. The peso soon declined to 2.05, recovering to 1.70-1.85. Why was a deeper devaluation avoided? First, because so much money--pesos and dollars--remains unavailable in frozen bank accounts. Second, because the government has spent at least $150 million of its currency reserves actively supporting the peso, the Wall Street Journal reports. Obviously, the Duhalde team has put a high priority on keeping the peso's market value close to the official value while they resolve long-term problems like releasing funds frozen in the bank, approving a budget and obtaining IMF refunding. They've asked $15 billion from the IMF. The question is, will reserves last long enough?

Venezuela
Meanwhile in Venezuela today, opponents of populist President Hugo Chavez have used the occasion of the 44th anniversary of the overthrow of the dictator Marcos Perez Jimenez to demonstrate against his government. Although Chavez mobilized a countermarch in response, it is apparent that he has lost much of the enormous popularity he had when he was elected and obtained voter approval of constitutional changes that concentrated power his hands. It is not to much to say that, while Chavez now controls the nation's government institutions, he has lost the people. Not a good position for a populist.
http://www.el-nacional.com/Articulos/Articulo.asp?idSeccion=64&Plantilla=3&id=3867

posted by Richard 11:39 AM
. . .
Start

posted by Richard 5:31 AM
. . .


. . .