Latin America News Round-up

Argentina puts officials on trial over the abuses of the ‘Dirty War’. Washington Post
Argentine Stocks Cap Best Year Since 1991 as Default Risk Eases. Bloomberg

Bolivia demands access to Pacific Ocean: Arica tunnel. Reuters
Bolivia to Restart Gas Project Stalled by Scandal. Latin American Herald Tribune
Fugitive Bolivian opposition leader ‘has fled to US’. AFP
Bolivia’s Morales lashes out at Obama. PRESS TV
Bolivian Government to Back Coca-Based Soft Drink. EFE
Two People Reported Missing in Central Bolivia Downpours. Latin American Herald Tribune

Ecuador Prez: US Extremists Plot to Destabilize. AP
Ecuador Retired Another $55M Of 2012, 2030 Bonds. Dow Jones

Venezuela Central Bank Estimates 2.9% GDP Contraction For ‘09. Dow Jones
Venezuela captures bigger drug haul in 2009. Reuters
Venezuela, Russia May Develop More Orinoco Oil, Universal Says. Bloomberg
Venezuela’s PDVSA, Italy’s Eni to Extract, Refine Orinoco Oil. EFE
Venezuela Says US Violating Airspace From Curacao. AP
Hugo Chavez mocks Venezuela coup, Fidel Castro death forecast. Reuters

Andean Region
Uribe insists on US ratification of free trade pact. Colombia Reports
Peru to Invest 25 Billion Soles in Public Works (Update1). Bloomberg
Fujimori 25-year sentence upheld by Peru Supreme Court. BBC
Chile Central Bank To Maintain Interest Rate Until At Least 2Q -Minutes. Dow Jones

Southern Cone
Booming economy, government programs help Brazil expand its middle class. Washington Post
Brazil to Use Sovereign Fund to Stem Real Gain (Update2). Bloomberg
Brazil’s Lula signs law cutting CO2 emissions. AFP
Brazil: Planned Probe into Military Abuses Not About Vengeance. Latin American Herald Tribune
Paraguay economy seen growing 4.2 pct in 2010 – gov’t. Reuters

México, Central America and the Caribbean
7,724 Slain in Mexico in 2009. Latin American Herald Tribune
Mexican judge seeks release of US journalist murder suspect. AFP
Honduras’ political crisis worsens its economic downturn. Xinhua
Violence hits critics of mine proposed by B.C. firm. Canwest News Service
A Black Market Finds a Home in the Web’s Back Alleys. The New York Times
NY-based attorney sceptical about IMF deal. Jamaica Observer
IMF Recapitalizes The Caribbean. Oxford Analytica
Haiti’s president promises fair election. AP
Venezuelan-Cuban Firm to Build Airport in Northern Haiti. Latin American Herald Tribune

Region: Trade, Security, Economy and Integration
U.S. diplomacy stumbles in Latin America. The Los Angeles Times
In the next decade, I hope Latin America will continue to fight back. The Guardian

Argentina [contents]

Argentina puts officials on trial over the abuses of the ‘Dirty War’
Juan Forero. Washington post. December 28, 2009

They are old and balding now, the 15 defendants standing trial before a three-judge panel near the Argentine capital’s bustling port. But prosecutors say they were once the feared henchmen of a brutal military dictatorship.

Argentina has tried military men before. But this trial, of officers and policemen who ran clandestine torture centers known as the Athletic Club, the Bank and Olimpo, is one of a string of new proceedings that by next year will close some of the most emblematic cases of alleged state terrorism under Argentina’s 1976-1983 dictatorship.

With former generals and admirals well into their 70s and the courts emboldened to hand down severe penalties, Argentina is finally close to delivering justice for the estimated 30,000 people killed by state security services during the “Dirty War,” including some who were thrown from airplanes after being tortured and sedated.

“I think and I hope this is the beginning of the end of a long process that began in 1983 with the return of democracy,” said Gastón Chillier, director of the Center for Legal and Social Studies, a Buenos Aires rights group. “Next year will be especially critical.”

The trials in Argentina come as other South American countries grapple with delivering justice for the victims of dictatorships and government-linked death squads.

In Brazil, President Luiz Inácio Lula da Silva is proposing a commission to investigate allegations of torture by the military during that country’s 1964-1985 dictatorship. In Peru, a former president, Alberto Fujimori, was convicted of murder in April for death-squad activities during his 10-year rule. And in Colombia, army generals and colonels accused of widespread human rights abuses are for the first time being investigated by civilian prosecutors.

Among the countries that have most aggressively sought to address past crimes is Chile, which has convicted 277 members of Gen. Augusto Pinochet’s 16-year dictatorship of myriad rights abuses, according to New York-based Human Rights Watch.

But no country has gone after former state agents as sweepingly as Argentina.

Using ordinary penal law and the criminal courts, prosecutors have won about 60 convictions since 2005 against defendants accused of violating human rights. An additional 627 former military officers, policemen and officials have been charged. In all, 325 cases are open nationwide, most involving former members of the security services accused of kidnapping and killing leftists, according to the Center for Legal and Social Studies.

Achieving justice has not been easy. Barracks revolts in the 1980s led to a “full-stop” law that ended investigations and a “due obedience” law that absolved those who said they were following the orders of superiors, a defense rejected at the Nuremberg trials. In the 1990s, President Carlos Menem pardoned those who had been convicted.

But in 2005, Argentina’s Supreme Court annulled the amnesties, and a revitalized judicial system began to prosecute. Convictions have been won against once-influential figures in Argentina’s security forces, including Luciano Menéndez, a former regional army commander, and Miguel Etchecolatz, a former Buenos Aires provincial police commissioner.

Now, though, the men on the block include some of the dictatorship’s most notorious figures.

Among them are former Gen. Jorge Rafael Videla, who led the junta that governed after a 1976 coup, and Argentina’s last dictator, Reynaldo Bignone. There is also Alfredo Astiz, nicknamed “Blond Angel of Death.” Using his boyish good looks, prosecutors say, Astiz infiltrated a leading human rights group in 1977. That led to the abduction and murder of three of the group’s founders, a journalist and two French nuns.

In a trial that began Dec. 11, Astiz and 18 others are accused of plying their trade at the Navy Mechanics School, which processed 5,000 prisoners, most of whom never came out alive. Next year, trials begin for those charged with participating in Operation Condor, in which dictatorships across much of South America cooperated in hunting down and killing leftists.

Estela de Carlotto, president of the Grandmothers of the Plaza de Mayo, a rights group, said justice is being served.

“We are giving the predators the opportunity they never gave our children,” said de Carlotto, whose daughter was abducted and never seen again. “We are giving them the opportunity to defend themselves in court, to speak out, to have a just process. But we are also asking for convictions.”

The courts here have requested declassified U.S. cables that detail what the United States knew about Argentine military operations in the war against leftist guerrilla groups.

Carlos Osorio, who oversees the Argentina project for the National Security Archive, a Washington policy group that compiles government documents, said Argentine prosecutors may end up using several hundred of about 8,000 declassified State Department documents. Those papers show how U.S. Embassy officials compiled reports on such issues as the pursuit of suspected guerrillas outside Argentina’s borders and details on the abductions by Argentine intelligence operatives. Osorio said Argentina’s ambassador in Washington, Héctor Timerman, has been petitioning the CIA and other agencies to open their files on Argentina.

“The documents that have been declassified are very rich, but there are some holes, and they can be filled with the documents in the hands of the American intelligence agencies,” Osorio said.

Delia Barrera, who was tortured in the Athletic Club detention center in 1977, is now among the witnesses for the prosecution. Speaking outside the courtroom on a recent day, she recalled how her husband told her to fight on for him after he was led away by military officers. She never saw him again.

“For me, this is a fight for justice, for memory, for truth — it’s a commitment for life,” she said. “Everything I do and will continue to do, until the last day of my life, is a commitment with those words, which have stayed with me in my soul.”

Argentine Stocks Cap Best Year Since 1991 as Default Risk Eases
James Attwood and Drew Benson. December 30, 2009

Dec. 30 (Bloomberg) — Argentina’s main stock index completed its biggest annual gain in 18 years as a rebound in prices on the country’s commodity exports eased concern that the government will default for a second time this decade.

The Merval index’s 115 percent rise this year is its best performance since 1991 and reverses a 50 percent drop in 2008, according to Bloomberg data. Argentina’s dollar-denominated bonds returned 133 percent this year, the most since at least 1994, according to data compiled by JPMorgan Chase & Co. They lost 58 percent last year.

“It’s due to some mispriced risk,” Brian Chase, head of Southern Cone equity research at JPMorgan Chase & Co., said today by telephone. “Being a high-risk country related to the political and economic backdrop, it reacted more harshly than other markets, so it’s had a longer way to go to recuperate.”

The Merval was the fourth-best performer this year among 91 global benchmark indexes tracked by Bloomberg. Investor confidence rose as commodity prices soared 32.9 percent this year, according to the UBS Bloomberg CMCI commodity index, and the government said it plans to exchange $20 billion of defaulted debt.

The intended swap, which will enable Argentina to tap international credit markets for the first time since it defaulted on $95 billion of bonds in 2001, has pushed the yield on the benchmark 8.28 percent dollar bonds due in 2033 down to 11.31 percent from 15.8 percent six months ago. The extra yield investors demand to own Argentine bonds rather than U.S. Treasuries shrank to its lowest since August 2008, slipping below 6.5 percentage points, according to JPMorgan.

Default Concern

The Merval lost half its value last year as the global financial crisis stifled the country’s commodity export revenues and President Cristina Fernandez de Kirchner revealed plans to seize $29 billion in private pension funds. Argentina is the world’s second-biggest corn exporter, third-largest soybean producer and eighth-largest wheat exporter.

The five banks in the Merval soared at least 140 percent this year as the bond rally pointed to increased values of their fixed-income holdings. Government and central bank securities account for more than a quarter of Argentine bank assets, according to Raymond James & Associates Inc. in Buenos Aires.

Banco Patagonia SA was the index’s top performer with a 210 percent surge while a rally in raw-materials prices fueled advances by companies such as Tenaris SA.

South America’s second-biggest economy will expand 4.1 percent next year after contracting this year for the first time since 2002, according to Banco Santander SA estimates.

“Our analysts currently believe that the risk being priced into stocks now is more or less accurate,” JPMorgan’s Chase said. “That said, we could see credit spreads come down further, which would be supportive for equities.”

To contact the reporters on this story: James Attwood in Santiago at

Bolivia [contents]

Bolivia demands access to Pacific Ocean: Arica tunnel
Reuters. January 4, 2010

SANTIAGO (Reuters) – Three Chilean architects proposed a plan on Friday to expand sea access for Bolivia, which has been landlocked for more than a century, by constructing a tunnel that will run through Chile’s first region in Arica.

Sea access has been a major issue for Bolivia since the 1879-1883 War of the Pacific that allowed Chile to annex a vast northern expanse of land from both Peru and Bolivia.

The proposed tunnel would stretch from the Bolivian border through Chile’s Arica to an artificial island built in the Pacific Ocean.

However, Peru is disputing maritime border issues with Chile as they believe the artificial island, built in the Pacific Ocean, will be within Peruvian waters and not Chilean waters.

“Neither Chile or Peru will lose not one centimeter of land and at the same time its a solution to Bolivia’s problem (…) to communicate with the great Pacific ocean with all its economic characteristics,” said architect Carlos Martner, who’s idea it was to construct the tunnel.

Chile says its maritime border with Peru is a horizontal line in the Pacific that was established in agreements signed in 1952 and 1954.

But Peru claims that those are not border demarcation pacts, but rather fishing agreements between both countries, and says the border should be considered as a diagonal line equidistant between both countries.

The conflict between Bolivia and Chile these days is squarely at the center of Bolivia’s refusal to export any of its abundant natural gas supplies to energy-poor Chile, which last year was at the brink of an electric rationing.

“I don’t want to think that this demand (…) of water access between Peru and Chile will affect and delay one of the possible historical solutions for sovereign access to the sea,” said Bolivian President Evo Morales.

Bolivian Consulate, Magali Zegarra, who is located in Arica, said Chile will obviously invest in the project as construction will be on Chilean territory and therefore under Chilean jurisdiction.

But all three countries, Peru, Chile and Bolivia will need to come to a mutual agreement before construction can begin.

SANTIAGO, June 5 (Reuters) – Landlocked Bolivia could have its coveted sea access with the construction of a tunnel that will run through Chile’s northern region of Arica, according to a plan proposed by three Chilean architects.

Sea access has been a major issue for La Paz since the 1879-1883 War of the Pacific that allowed Chile to annex a vast northern expanse of land from both Peru and Bolivia and leave South America’s poorest nation without a maritime outlet to export its natural gas richness.

The proposed tunnel would stretch from the Bolivian border through Chile’s Arica to an artificial island built in the Pacific Ocean.

“Neither Chile or Peru will lose not one centimeter of land and at the same time its a solution to Bolivia’s problem (…) to communicate with the great Pacific ocean with all its economic characteristics,” said to Reuters ? Architect Carlos Martner, who’s idea it was to construct the tunnel.

But the plan won’t be that simple.

The artificial island would be located in waters that are in the middle of a maritime spat between Peru and Chile that escalated to the International Court of Justice.

Santiago says its maritime border with Peru is a horizontal line in the Pacific that was established in agreements signed in 1952 and 1954.

But Lima claims that those are not border demarcation pacts, but rather fishing agreements between both countries, and says the border should be considered as a diagonal line equidistant between both countries.

In other hand, recent diplomatic friction between Peru and Bolivia could hurt the proposed plan.

Bolivian president, Evo Morales, said this week that his Peruvian counterpart, Alan Garcia, is using the maritime demand at The Hague to “harm Chile and Bolivia in their negotiations” about Bolivian access to the Pacific Ocean.

Morales has also criticized Peru for giving asylum to three former Bolivian ministers accused in their country of genocide.

La Paz and Santiago, which don’t have diplomatic relations, recently agree an agenda that includes Bolivian demand for a sovereign access to the Pacific.

Bolivia has the second biggest natural gas reserve of South America, after Venezuela.

(Reporting by Alexia Vlahos)

Bolivia to Restart Gas Project Stalled by Scandal
Latin American Herald Tribune. January 2, 2010

LA PAZ – State-owned energy company Yacimientos Petroliferos Fiscales Bolivianos said it will resume plans to build a natural gas processing plant in eastern Bolivia after the project was stalled in 2009 over a corruption scandal.

YPFB’s president, Carlos Villegas, told reporters that the state-owned firm will hold a new bidding and selection process this month and that the plant – which will separate liquid components from the gas – is scheduled to be finished by the end of 2011.

“We’ve expended every effort to avoid further economic damage to the state through the Rio Grande plant. We can now (give full guarantees for) this plant in a context different from what existed in 2009,” Villegas said.

Under the original plan, the plant was to have been built this year in Rio Grande, Santa Cruz province, but the project was stalled after a corruption scandal that led to the dismissal and subsequent jailing of YPFB’s then-boss, Santos Ramirez.

In July 2008, YPFB and the Catler Uniservice consortium signed an $86 million deal for the plant during a ceremony attended by President Evo Morales, who was a close friend of Ramirez’s before the scandal broke.

However, Catler executive Jorge O’Connor D’Arlach was shot and killed by robbers while arriving at the home of Ramirez’s relatives in late January 2009 with $450,000 in cash in his possession, which prosecutors say was a kickback.

YPFB management then cancelled the contract in April, saying irregularities had been detected in the selection process.

Villegas said Thursday that the trust established by the Bolivian government to finance construction of the plant has been revoked and therefore the new project will be carried out with YPFB’s own funds.

He added that a recent contract under which Brazil has agreed to pay up to $2.16 billion through 2019 for the liquid components of the natural gas it buys from Bolivia will benefit the country while the new plant is being built.

Fugitive Bolivian opposition leader ‘has fled to US’
AFP. January 1, 2010

WASHINGTON – A Bolivian opposition leader who was threatened with arrest after his defeat in recent elections has fled to the United States, President Evo Morales claimed Thursday.

Manfred Reyes Villa lost to Morales a December 6 presidential poll and a warrant was issued for his arrest last Wednesday, after charges of tax evasion and election fraud.

An arrest order was also issued for his wife.

“The information that I have is that Manfred is already in the United States,” said the Bolivian president, who accused the police and others of aiding Reyes’s escape.

Morales won the election in a landslide, which gave the leftist leader unfettered control of Bolivia’s legislature and a solid grip on the reins of governmental power.

Reyes, a former military officer and ex-governor of the state of Cochabamba, had been in hiding since the vote.

Reyes had filed a complaint pending against the Morales government with the Inter-American Commission for Human Rights.

His attorney, Daniel Humerez, decried what he called a “politicized” investigation against his client.

“We want the prosecutor to recuse himself” from the investigation, Humerez said.

Bolivia’s Morales lashes out at Obama
PRESS TV. January 1, 2010

Bolivian President Evo Morales has strongly criticized his American counterpart for failing to change Washington’s policy towards Bolivia.

“When I was informed that Obama had won the elections I said: a black man isn’t going to exclude an Indian, but it turned out to be the opposite,” Morales said on Thursday.

“That is why I say that the only thing that has changed in the United States is the color of the president. I regret that a lot,” he added.

His comments came after US President Barack Obama excluded Bolivia from special trade benefits for a second consecutive year.

The US leader signed into law an agreement that grants most goods from 131 countries duty-free status for entry into the US.

Morales also noted that his country does not need Washington and prefers cooperating with allies across the world such as Iran and South Africa.

Bolivian Government to Back Coca-Based Soft Drink
EFE. December 30, 2009

LA PAZ – President Evo Morales’s government will support a private firm’s plan to produce a coca-based soft drink in line with its policy to foster new legal applications for the leaf that is the source of cocaine, a Bolivian official said Wednesday.

“At the beginning it is a private initiative to produce an energy drink from coca, but we are seeing how we can give it impetus, because the industrialization of coca interests us,” the deputy minister of rural development, Victor Hugo Vazquez, told Efe.

He said the government has yet to decide whether it will enter a joint venture with the company or if the beverage should bear the name suggested by coca growers: “Coca Colla.”

Bolivia, like neighboring Peru, permits legal cultivation of coca in limited quantities for use in cooking, folk medicine and Andean religious rites. In its unadulterated form, coca is a mild stimulant that wards off hunger and combats the effects of high altitude.

Morales began his political career as the leader of a coca growers union in the central region of Chapare and he remains the formal head of that organization.

Since taking office in January 2006, he has shifted the focus of Bolivia’s counter-narcotics effort from coca eradication to pursuit of the criminal outfits that turn the leaf into illegal drugs, and cocaine seizures have increased dramatically.

The leftist administration of Indian-majority Bolivia’s first indigenous president has also sought other legitimate uses for coca, as many peasants earn their meager livelihoods from cultivation of the leaf.

Currently, Deputy Minister Vazquez told Efe, Bolivian companies are using coca to make teas, syrups, toothpaste, liqueurs, candy and pastry.

Morales recently suggested that if all of the various coca-industrialization projects bear fruit, the area of land authorized for legal cultivation of the leaf may be expanded from 12,000 hectares (29,629 acres) to 20,000 hectares (49,382 acres). EFE

Two People Reported Missing in Central Bolivia Downpours
Latin American Herald Tribune. January 2, 2010

LA PAZ – Two people, a father and his son, went missing in the central Bolivian region of Chapare in a flood caused by the heavy rains that are falling all across the country, the director de the Defense Ministry’s emergency management office, Gen. Rafael Uria, said on Saturday.

Uria said that emergency services are looking for the two people who fell three days ago from a boat into the water and who will remain on the list of missing persons as long as their bodies are not found to confirm their deaths.

According to the official, if they are found dead, this would be the second case of fatalities from the rains in Bolivia, after three women, two adults and a little girl, died on Dec. 26 when they fell in a river in the western Andean province of Potosi.

The tropical area of Chapare has been hit hardest by overflowing rivers, and the municipalities there have declared a red alert, while the rest of Bolivia is on orange alert,” Gen. Uria added.

In recent weeks, the rains affected 5,500 families across the country, of whom 2,200 are in Chapare, according to a report by the civil defense agency.

President Evo Morales’ government is spending $6.6 million to deal with the problems that have arisen in the country during the rainy season.

Ecuador [contents]

Ecuador Prez: US Extremists Plot to Destabilize
AP. January 2, 2010

QUITO, Ecuador (AP) — Ecuadorean President Rafael Correa says right-wing extremists in the United States are conspiring against his government by attempting to destabilize the poor Andean nation.

The leftist president contends that U.S.-based groups — although not the U.S. government — are funneling aid to parts of Ecuador’s indigenous movement.

He says plots to destabilize progressive governments no longer use direct confrontation.

Indian protests and roadblocks in recent months have forced Correa to reconsider proposals to allow mines on Indian lands without their consent and to put water under state control.

Ecuador’s president gave no examples of the aid he denounced, however.

Correa spoke Saturday on his weekly radio program.

Ecuador Retired Another $55M Of 2012, 2030 Bonds
Monica Orozco. Dow Jones Newswires. December 30, 2009

QUITO (Dow Jones)–Ecuador has retired an additional $55 million in defaulted 2012 and 2030 bonds, completing the buyback offer launched earlier this year on the debt, the country’s finance minister said Wednesday.

In June, Ecuador bought back about 91% of its defaulted Global 2012 and 2030 bonds, spending about $900 million through a modified Dutch auction to retire $2.9 billion of bonds.

Finance Minister Maria Elsa Viteri said at a press conference Wednesday that of the remaining $291 million, Ecuador bought back $55 million, leaving $236 million of the bonds outstanding.

Viteri said Ecuador will announce its strategy for the remaining bonds in the next few days. The minister said the outstanding balance was minimal, and that she hoped it wouldn’t affect Ecuador’s access to credit next year.

In November, Ecuador opened the offer in Italy seeking to buy back the rest of the bonds. It’s paying the same 35 cents on the dollar for the latest bonds retired.

In December 2008, the Ecuadorean government refused to pay the interest on its 2012 and 2030 bonds, which it said were “illegal” and “illegitimate.”

Venezuela [contents]

Venezuela Central Bank Estimates 2.9% GDP Contraction For ‘09
Darcy Crowe and Dan Molinski. Dow Jones. December 29, 2009

CARACAS (Dow Jones)–The Venezuelan economy contracted 2.9% in 2009, confirming the country’s first recession in five years, according to preliminary estimates published Tuesday by the Venezuelan Central Bank.

The economy was dragged down by a slump in the oil sector, which suffered a 6.1% decline in the year, the central bank said in its year-end report. Non-oil gross domestic product dropped 1.9%.

Manufacturing activity, which has been one of the main factors driving down economic activity in 2009, dropped 7.2% in the year, while mining fell 10.2%.

The balance of payments posted an $11 billion deficit. The country’s current account posted a $12.4 billion surplus, down 66.8% against the previous year, as a result of a decline in revenue from oil exports. The decline was partly the result of a 32.7% drop in the price of Venezuela’s basket of oil products.

Venezuela captures bigger drug haul in 2009
Reuters. January 2, 2009

CARACAS (Reuters) – Venezuela reported on Saturday 60 metric tons of drugs were confiscated in 2009, an 11 percent bigger haul than the previous year, and said anti-narcotics efforts had improved since it ended cooperation with the United States.

The South American nation is a major transit country for Colombian cocaine to Europe and, to a lesser extent, the United States. Cocaine and marijuana accounted for nearly all of Venezuela’s drug confiscations in 2009.

Accused by critics of leniency in the drug fight and collusion with Colombian rebels who depend on smuggling for financing, the government of President Hugo Chavez counters that it has stepped up interdiction notably in recent years.

“The 2009 figure shows the government’s performance in battling drugs, and makes Venezuela one of the most effective countries in this respect,” state news agency ABN said.

Amid deteriorating bilateral relations, Chavez stopped cooperation with the U.S. Drug Enforcement Agency in 2005.

Venezuela’s National Drugs Office head Nestor Reverol said the higher levels of drugs’ confiscation and destruction since then “shows the U.S. government had a policy of obstruction, to prevent the reduction of this social ill.”

Washington’s leading critic in Latin America, Chavez frequently says consumption in the United States and Europe is the main factor driving the illegal drug trade.

According to the drug office’s latest statistical breakdown, between January 1 and December 24 of 2009, cocaine accounted for 27.5 metric tons or 45.9 percent of the drugs captured, while marijuana was 32.2 metric tons or 53.8 percent.

In 2008, the cocaine haul was 33.6 metric tons or 61.5 percent of the total, and marijuana 20.7 metric tons or 37.9 percent.

In November, a U.S. official said the problem of drug smuggling through Venezuela had grown worse since Chavez ended cooperation with the United States.

Most of the Colombian cocaine smuggled out of South America by air for the U.S. market was moved through Venezuela, said David Johnson, the assistant secretary of state who heads the U.S. Bureau of International Narcotics and Law Enforcement Affairs.

(Reporting by Andrew Cawthorne, by Jackie Frank)

Venezuela, Russia May Develop More Orinoco Oil, Universal Says
Jose Orozco. January 3, 2010

Jan. 3 (Bloomberg) — Venezuela and Russia may develop the Junin 3, Ayacucho 2 and Ayacucho 3 oil blocks in the South American country’s Orinoco Belt as part of agreements signed late last year, El Universal reported.

The three Orinoco blocks would add more than 450,000 barrels of oil per day to joint production between the two countries, El Universal said, citing people familiar with the projects.

Russia wants to develop its Venezuelan oil business to strengthen its presence in the U.S. East Coast market, the Caracas-based newspaper said.

Venezuela’s PDVSA, Italy’s Eni to Extract, Refine Orinoco Oil
EFE. January 2, 2009

CARACAS – State-owned Petroleos de Venezuela SA and Italy’s Eni have agreed to form a pair of joint ventures to extract and refine oil from the Junin 5 block in the Orinoco Belt, PDVSA said Thursday.

The deal, which still must be approved by the companies’ boards of directors and Venezuela’s National Assembly, is to be signed in Caracas on Jan. 26, PDVSA said in a statement on its Web site.

PDVSA President Rafael Ramirez and Eni CEO Paolo Scaroni agreed to form separate joint ventures for extracting and refining the heavy crude found in that block, with the Venezuelan state-owned firm taking a 60 percent stake and the Italian oil major 40 percent.

The exploration venture will operate a 424-square-kilometer (164-square-mile) area of Junin 5 – in eastern Venezuela – with the goal of extracting some 75,000 barrels per day of crude beginning in 2014.

Once production climbs to 240,000 bpd, construction will begin on a joint refinery at the nearby Jose Industrial Complex, PDVSA said.

Venezuela produced “close to 600,000 bpd of crude” this year in the Orinoco Belt, where a score of multinational companies are operating through joint ventures controlled by PDVSA, according to the statement.

Eni is one of close to 20 multinational oil firms involved in the process of certifying the Orinoco Belt reserves, which could total 280 billion barrels, according to preliminary estimates.

Venezuela produces 3.1 million barrels of crude per day and is the world’s fifth leading oil exporter, according to Energy Ministry figures. EFE

Venezuela Says US Violating Airspace From Curacao
AP. December 31, 2009

CARACAS, Venezuela (AP) — Venezuela’s government said Thursday that U.S. military counter-drug flights from nearby Dutch islands are violating its airspace in preparation for an attack. A U.S. official denied the allegation.

A Venezuelan Foreign Ministry statement listed no examples of such violations, but it accused the United States of using ”the colonial territories of Aruba and Curacao in preparation for a military aggression against Venezuela.”

Venezuela’s president, Hugo Chavez, has repeatedly complained about Dutch permission for the U.S. to use the islands — Aruba is about 20 miles (30 kilometers) off his coastline — for flights meant to monitor drug planes from South America.

Chavez has repeatedly accused the U.S. of plotting to invade Venezuela or overthrow him since 2002, when a failed coup briefly removed him from power. U.S. officials have denied any such plans and say they did not back the coup.

The Foreign Ministry expressed doubt that the flights are aimed at drug traffickers and urged the Netherlands ”to abstain from attacking Venezuela or lending its collaboration to that end.”

A spokesman for U.S. Defense Department’s Southern Command in Miami, Stephen Lucas, denied that U.S. military flights out of Aruba and Curacao are violating Venezuelan airspace. He said a U.S. Navy plane accidentally strayed into Venezuelan airspace on a counter-drug mission seven months ago, but he said ”that is an anomaly, not standard operating procedure.”

He said the counter-drug flights from the Caribbean islands do not fly over Venezuela because Chavez has denied them access for years, even in cases of hot pursuit.

”It’s regrettable the government of Venezuela has chosen to downgrade its cooperation in counter-drug activities but that is the case,” Lucas said. ”The threat posed by transnational illicit trafficking is a threat to all the nations of the region.”

He also denied the flights had any purpose other than fighting narcotics trafficking.

”The point of the existence of our operations on the islands of Curacao and Aruba is counter-drug, and it has absolutely nothing to do with political or other events in Venezuela,” he said.

Chavez also has bitterly criticized neighboring Colombia’s decision to grant U.S. forces expanded access to its bases, and has said Venezuelan troops at a base near the Colombian border recently spotted what he believes was a U.S. drone in Venezuelan airspace.

Hugo Chavez mocks Venezuela coup, Fidel Castro death forecast
Andrew Cawthorne. Reuters. December 30, 2009

CARACAS (Reuters) – Venezuela’s President Hugo Chavez scoffed on Wednesday at U.S. magazine Newsweek’s predictions that he would be toppled by a military coup and his Cuban mentor Fidel Castro would die in 2010.

In a lengthy televised New Year’s address, Chavez, who has taken Castro’s position as Latin America’s leading critic of U.S. power, described Newsweek as “the empire’s magazine.”

“They feed on hatred and the wishes of the imperialism that they represent — big money, big newspapers, the TV stations of the global bourgeoisie,” he said.

In a list of 10 predictions for the world next year, Newsweek foresaw in Venezuela a year of soaring inflation, power blackouts, food shortages, spiraling crime and tumbling popularity for Chavez, with the mood on the street turning “mean” even among the poor who put him in power.

“The military steps in to depose Chavez and restore order, as 21st-century socialism spins toward the familiar 20th-century tableau of scarcity, poverty, and chaos,” it said in a year-end edition.

The fiery Chavez, who has been in power for a decade, said the only way there would be an uprising against him would be if the internal opposition brought an army from abroad.

“Our counter-attack would be tough, I warn them,” he said, drawing applause from an audience of ministers and supporters.


Newsweek also forecast the death of Castro, 83, next year.

“Fidel Castro has been ailing for years, and 2010 looks to be his last year on earth,” it said.

Chavez, who seldom gives a speech without sending a greeting or “Viva!” to the former Cuban leader, said Newsweek’s was the latest of many false predictions of Castro’s demise.

“They’ve been announcing for it for many years,” he said, adding he recently saw Castro demonstrate his good health by talking for more than five hours.

Chavez said he joked to his brother and Cuban President Raul Castro about it. “I told Raul, ‘this guy’s going to bury you, me and all of us’.”

Chavez was in a buoyant mood despite news this week that Venezuela’s economy had shrunk an estimated 2.9 percent in 2009 — its first contraction in five years.

Critics say that is evidence of the failure of his decade-long experiment in “21st century socialism”, but Chavez blames OPEC-mandated oil output cuts and the global crisis.

Either way, Venezuela has hit the recessionary cycle after most other nations.

Rallying supporters for a political battle in 2010, Chavez called for “patriotic passion” to resist an opposition attempt to quash his majority in the National Assembly legislature at an election scheduled for September.

(Editing by Cynthia Osterman)

Andean Region [contents]

Uribe insists on US ratification of free trade pact
Colombia Reports. January 2, 2010

Colombian President Alvaro Uribe on Thursday again asked U.S. Congress to ratify the pending free trade agreement between the two countries.

In his New Year’s speech, Uribe told the Americans to take into consideration how many successes his government has had in improving security and the human rights situation in Colombia.

However, the ongoing killings of workers from labor organisations, recent scandals involving the state intelligence agency DAS, the reported killings of thousands of civilians by Colombia’s armed forces, and an ongoing clash with the country’s Supreme Court over the prosecution of politicians with links to paramilitary death squads have stalled the ratification of the pact in Congress.

The President asks Washington why it has ratified free trade pacts with other countries, but not with Colombia.

“The United States need to recognize the efforts we are making, we are the leading country in the fight against drug trafficking, we have had the most intense war against terrorism and have done it all under supervision of the international community,” Uribe said on Thursday.

“Our problem with terrorism has been so big that we could have followed the bad example of others and refuse international supervision … we have done none of that,” Uribe continued.

The president hopes that, after dealing with the proposal to reform the U.S. health care system, Congress will prioritize the FTA with Colombia.

“These democratic values need to be recognized by the international community. Because of this we expect U.S. Congress to quickly ratify the treaty with Colombia,” Uribe said.

The Colombia-U.S. FTA was signed by Uribe and former U.S. President George W. Bush in 2008, but has been receiving resistance from the Democratic majority in U.S. Congress.

Peru to Invest 25 Billion Soles in Public Works (Update1)
John Quigley. Bloomberg. January 2, 2009

Jan. 2 (Bloomberg) — Peru’s government aims to invest 25 billion soles ($8.66 billion) in public works this year, a 38 percent increase from last year, President Alan Garcia said today.

Private investment may rise to 100 billion soles, up 67 percent from last year, as the government seeks to improve the country’s infrastructure, Garcia said in an interview with Radioprogramas.

More than 92 percent of Peruvians might have electricity by the end of this year and 90 percent may have access to potable water, Garcia said. The government also aims to build an estimated 7,000 kilometers (4,350 miles) of new roads by February 2011, he said.

“I want to ensure that 25 billion soles are invested in public works and that there is nothing left over in the budget,” Garcia said. “We need more private-sector investment to build more bridges, airports, ports and roads.”

Peru’s government plans to offer contracts for 20 infrastructure projects this year to spur economic growth, including a highway to link Callao, the country’s largest port, to a river port in the central Amazon jungle. The government also aims to auction licenses for railway, energy and irrigation projects.

A free-trade agreement with the European Union probably will be signed this year, giving Peruvian exporters access to a market with 450 million consumers, Garcia said. A free-trade accord signed with China last year will take effect in the last week of January, he said.

To contact the reporters on this story: John Quigley in Lima at

Fujimori 25-year sentence upheld by Peru Supreme Court
BBC. January 2, 2010

Peru’s Supreme Court has upheld a 25-year jail sentence imposed on former President Alberto Fujimori.

The term was handed down last April for ordering the security forces to carry out killings and kidnappings.

Fujimori, who led Peru from 1990 to 2000, returned from exile in late 2007 to face his accusers.

It was the first time a democratically elected Latin American leader was found guilty of human rights abuses in his own country.

Fujimori had denied overseeing a death squad as part of a “dirty war” against suspected Maoist Shining Path guerrillas in the early 1990s.

But he was convicted of directing the killings of 25 people, following a 15-month trial.

Fujimori is serving three other concurrent prison sentences.

In September last year, he was found guilty of illegally tapping phones and bribing journalists, businessmen and opposition politicians.

Last July, he was sentenced to seven-and-a-half years for giving $15m (£9.3m) in state funds to his spy chief, Vladimiro Montesinos.

And in 2007, he was sentenced to a six-year term on separate charges of abuse of power.

After his government was brought down in 2000, Fujimori escaped to Japan, where his parents were born, and lived in exile for seven years.

Chile Central Bank To Maintain Interest Rate Until At Least 2Q -Minutes
Anthony Esposito, Dow Jones Newswires. January 4, 2010

SANTIAGO (Dow Jones)–The Chilean central bank will keep its benchmark interest rate at the current record low 0.5% until “at least” the second quarter, according to the minutes of its December monetary policy meeting released Monday.

In the first seven months of 2009, the bank aggressively slashed the benchmark overnight rate, known as the TPM, by an unprecedented 775 basis points to its current level.

In the previous meeting in November, the bank announced it would withdraw one of its so-called complementary measures, namely a 90- and 180-day line of credit for financial institutions.

At the December meeting a council member showed concern that November inflation had been below expectations. Inflation will remain negative for some months, but will gradually increase over the medium term, the council member said.

Some council members highlighted the necessity to maintain highly expansive monetary policy in the face of external credit markets with little activity, and high demand for liquidity.

According to the minutes, council members are also monitoring the appreciation of the Chilean peso relative to the U.S. dollar, although they noted that the peso’s behavior during the crisis was comparable to that of currencies of other emerging economies.

In 2009, the peso firmed about 20% against the U.S. currency, increasing exporters’ concerns that their products were losing competitiveness in foreign markets.

Southern Cone [contents]

Booming economy, government programs help Brazil expand its middle class
Juan Forero. Washington Post. January 3, 2010

RIO DE JANEIRO — Teresiña Lopes Vieira da Silva peddles spices and peppers from a street stall, but hers is no fly-by-night business.

She sells to restaurants in Rio’s swankiest districts and sees her success reflected in the two houses she has bought. Instead of scraping by, she has joined the middle class in an increasingly affluent Brazil, her accomplishment made possible by government loans and a booming economy.

“Now I live in a house with six rooms,” said Vieira da Silva, 62, speaking of her home in Rocinha, a poor but bustling district with growing ranks of entrepreneurs. “It does not have a pool yet, but I am planning to build one.”

Once hobbled with high inflation and perennially susceptible to worldwide crises, Brazil now has a vibrant consumer market, investment-grade status for its sovereign debt, vast foreign reserves and an agricultural sector that is vying to supplant that of the United States as the world’s most productive.

Brazil’s $1.3 trillion economy is bigger than those of India and Russia, and its per-capita income is nearly twice that of China. Recent discoveries by Brazil’s state oil company are expected to make the country one of the world’s biggest crude producers. An unwieldy bureaucracy and red tape have not slowed foreign investment, which at $45 billion in 2008 is three times as much as it was a decade ago.

Economists and social scientists here say the booming trade-oriented economy and innovative government programs are lifting millions from poverty and shaking what was once a certainty: that a person born poor in Brazil would surely die poor.

Solid, tangible progress

Since 2003, more than 32 million people in this country of 198 million have entered the middle class, and about 20 million have risen above poverty, according to the Center for Social Policies at the Getúlio Vargas Foundation, a Rio policy group that studies socioeconomic trends.

“We can generate inclusive growth as probably no other country can, given the scale of the country and the level of inequality,” said Marcelo Neri, chief economist at the center. “Brazil is following what you may call a middle path. We are respecting the rules of the market and, at the same time, we are doing very active social policy.”

Since 2002, a commodities boom has fueled strong growth and lowered poverty across Latin America. But Brazil’s progress is perhaps the most notable because it has far more poor people than any other South American country and has long been one of the world’s most unequal societies.

Neri said Brazil has made solid progress by creating 8.5 million jobs since 2003, and by instituting programs such as food assistance for poor families and low-interest credit for first-time home buyers and small-business owners.

The change has been tangible to people such as Thiago Firmino, 28, a teacher. He has lived in a poor locality all his life, but he owns a car and a computer and says his son’s life will be easier than his.

“A lot of people improved their lives,” said. “It is not like they built themselves a castle, but, you know, they have taken little steps and made things better.”

The foundation of today’s success was laid during the administration of Fernando Henrique Cardoso, an academic-turned-politician best known for taming inflation in the mid-1990s. The man who has gotten much of the credit is his successor, President Luiz Inácio Lula da Silva, who as a union activist once railed against globalization.

Lula’s election to the presidency in 2002 sent shudders through Brazil’s economic elite, which worried that the former rabble-rouser would lead the country down a populist, anti-capitalist path, as Hugo Chávez did in Venezuela.

Lula did make ending poverty a priority, but he also proved to be a market-friendly steward of the economy and is popular today among Brazil’s business community.

With Asia hungry for soybeans, beef and iron ore, economic growth in Brazil averaged 4.2 percent annually from 2003 through 2008, a year in which foreign investment in the country posted a 30 percent increase over 2007, according to the U.N. Economic Commission for Latin America and the Caribbean. The worldwide economic crisis caused a brief downturn here, but economists say Brazil will post 5 percent growth in 2010.

At SulAmérica Investments in Sao Paulo, Marcelo Mello, vice president of asset management, said that in the past, investors worried about inflation and high interest rates.

Now, driven by increasingly affluent Brazilian investors, Mello said, SulAmérica is managing $9 billion, three times the amount from five years ago. “Through the increase in real income over the last 10 years, we’ve seen a huge movement in our Brazilian fund industry and the Brazilian markets,” he said.

The country’s stock market is minting record numbers of billionaires, and the wealth in Brazil is palpable. Luxury apartment houses are rising in fashionable districts, and the world’s most exclusive stores, from Tiffany’s to Gucci, consider Rio and Sao Paulo fertile markets.

Bullish about the future

Of course, most of Brazil’s people are far from rich. In the country’s vast urban slums, many youths turn to drugs, the quality of public schooling is poor and basic services such as health care are chronically underfunded, residents say.

“Can you believe this serves 150,000 people?” said Flavio Wittlin, who runs a group that helps get young people off the streets, as he walked through a tiny health center in Rocinha. He said many services in the district, from garbage pickup to policing, are substandard.

Still, Rocinha is chock-full of machine shops and small stores, many of them spurred by government loans.

Although Brazil’s industrial giants — such as the airplane maker Embraer and the mining company Vale — attract investors and headlines, the future is also rooted in businesses like Alan Roberto Lima’s sewing shop.

The shop, on the second floor of his house in a hardscrabble neighborhood on Rio’s outskirts, has only a half-dozen sewing machines. But Lima, 34, has in a few years found that Rio’s upscale boutiques are a ready market for his skirts and blouses.

Now he talks of his own clothing line and, if that is a success, opening his own store.

“Preferably,” he added, “near the beach.”

Brazil to Use Sovereign Fund to Stem Real Gain (Update2)
Tal Barak Harif. Bloomberg. January 04, 2010

Jan. 4 (Bloomberg) — Brazil’s decision to allow its sovereign wealth fund to buy dollars in the foreign-exchange market indicates it will use the investment vehicle to try to stem the real’s world-beating rally, Nomura Holdings Inc. said.

Treasury official Cleber Oliveira said last week that the year-old fund can make purchases of dollars in the market, creating another government-related buyer of U.S. currency in addition to the central bank.

The measure will fail to halt the real’s advance as foreign investment keeps pouring into the country’s financial markets, said Tony Volpon, Nomura’s head of Latin America strategy.

“It’s just another tool to weaken the currency and to help the exporters,” Volpon said in a Dec. 31 phone interview from New York. “It’s going to be very unsuccessful.”

President Luiz Inacio Lula da Silva is aiming to weaken the real to prevent a bubble in what Goldman Sachs Group Inc. called the world’s most “overvalued” currency in a November report. The real soared 33 percent last year, the biggest annual gain since its creation in 1993 and more than any other major currency, as Latin America’s largest economy was one of the first in the world to emerge from the global recession.

Finance Minister Guido Mantega imposed a 2 percent tax on foreigners’ purchases of stocks and fixed-income securities on Oct. 19 to ease the rally and shore up exporters’ profit margins. The real has declined 0.6 percent since the move. Mantega said in November that the government “won’t allow” the exchange rate to hurt the economy.

The real gained 0.9 percent today to 1.7284 per dollar at 9:25 a.m. in New York, from 1.7445 on Dec. 31.

Foreign Reserves

Phone calls to Finance Ministry spokeswomen seeking comment on the wealth fund weren’t returned.

Brazil created the fund, which had 16.3 billion reais as of Dec. 24, as a reserve to make debt payments in the event government revenue falls short. The fund may also be used to invest in Brazilian companies abroad. Unlike other sovereign wealth funds, Brazil’s isn’t funded with budget surpluses because the country runs a budget deficit.

The country’s foreign reserves climbed $32.2 billion last year to $239 billion as the central bank purchased dollars. Reserves touched a record high of $239.45 billion on Dec. 2, up from $55 billion six years earlier, according to central bank data.

‘Wall of Money’

A “wall of money” coming into the country may overwhelm government efforts to curb the real’s rally, Goldman Sachs economist Thomas Stolper said in November. Economists estimate the real will be little changed in 2010, closing the year at 1.75 per dollar, according to the median of 19 forecasts in a Bloomberg survey. It has gained 103 percent since Lula took office in January 2003, buoyed in part by a surge in the price of the country’s commodity exports.

Volpon predicts it will gain 8 percent to 1.60 by year-end because Brazil’s growing budget and current account deficits will attract foreign investment needed to finance them.

The budget deficit swelled to the equivalent of 4.1 percent of gross domestic product in the 12 months through November from 1.5 percent the previous year. The annual current account gap widened to $21.1 billion in November from $18.9 billion in October and will climb to $40 billion next year, according to the central bank.

The government’s development projects to prepare for the 2014 World Cup and 2016 Olympic games will also require international financing, Volpon said.

“Eventually more foreign flows will come to Brazil to help fund these projects,” he said. This “in turn will strengthen the real.”

Brazil’s Lula signs law cutting CO2 emissions
AFP. December 31, 2009

BRASILIA – President Luiz Inacio Lula da Silva Tuesday signed a law requiring that Brazil cut greenhouse gas emissions by 39 percent by 2020, meeting a commitment made at the Copenhagen climate change summit.

Brazil announced at the summit a “voluntary commitment” to reduce CO2 emissions by between 36.1 and 38.9 percent in the next ten years.

The new law, however, is subject to several decrees setting out responsibilities and regulations for the farming, industrial, energy and environmental sectors.

Lula is expected to sign the decrees in January after consulting scientists and other experts, officials said.

Despite its ambitious targets, Greenpeace’s top representative in Brazil, Sergio Leitao, called it merely a list of good intentions and accused Lula of using double standards in environmental issues.

“Brazil usually makes good speeches on the international stage, as in Copenhagen, but in practice it doesn’t keep its word,” he told reporters.

Before signing the new law, in fact, Lula vetoed three of its provisions, including a reference to “promoting the development of clean energy sources and the gradual phasing out of energy from fossil fuels.”

Environment Minister Carlos Minc said he was was pleased with the new law because it showed Brazil’s determination to respect the pledges it made in Copenhagen.

“It doesn’t matter if the Copenhagen summit didn’t get the results we wanted. We will still meet our goals,” he told reporters.

The climate change conference held in the Danish capital ended last week with a non-binding agreement that exposed the stark divide between rich and developing nations.

A total of 30 billion dollars was pledged from 2010-2012 to help poor countries in the firing line of climate change, and rich nations set a goal of providing 100 billion dollars annually in aid by 2020.

It established a goal of limiting warming to two degrees Celsius (3.6 degrees Fahrenheit), but did not impose binding targets to reduce the emissions of gases that scientists say are heating up the world’s atmosphere to dangerous levels.

The Copenhagen agreement was put together by leaders of the United States, China, India, Brazil, South Africa and major European nations, after it became clear the 194-nation summit was in danger of failure.

Brazil: Planned Probe into Military Abuses Not About Vengeance
Latin American Herald Tribune. January 2, 2010

SAO PAULO – Brazilian Human Rights Minister Paulo Vannuchi defended plans to create a truth commission to investigate human rights abuses under the 1964-1985 dictatorship, saying the probe would not be an act of revenge against the military.

“Creating a truth commission would benefit the armed forces … there’s no vengeful intent,” Vannuchi told the official Agencia Brasil news service.

The planned commission, mentioned in the recently published National Human Rights Plan, or PNDH, reportedly raised hackles among members of the military and prompted Defense Minister Nelson Jobim and the nation’s army, navy and air force commanders to submit their resignations to President Luiz Inacio Lula da Silva.

On Wednesday, Justice Minister Tarso Genro denied that Jobim and the top military brass had tendered their resignations; he acknowledged that the PNDH had sparked a dispute but said the differences are not “irreconcilable.”

Vannuchi, who stressed that the PNDH does not foresee the repeal of the 1979 amnesty law protecting agents of the junta, drew a distinction between military personnel “dedicated to the country and public service” and those allegedly responsible for torturing and killing opponents of the dictatorship.

“We need to finish the process without vengefulness, without returning to the past and with hands extended for national reconciliation,” the minister said, though adding that “can’t mean covering up” crimes against humanity.

But plans to create the commission have irked the nation’s military and prompted complaints of a hidden agenda to overturn the Amnesty Law, which shields both agents of the junta and dictatorship-era leftist militants – also implicated in rights abuses – from prosecution.

The PNDH says nothing about revoking the law but it recalls that Brazil’s highest court is considering a motion to not afford amnesty protection to “agents responsible for torture, homicide, forced disappearance” and other forms of politically motivated violence.

The Brazilian bar association – which filed the motion – and human rights groups say those offenses are considered crimes against humanity in international accords signed by Brazil and, as such, are not subject to the statute of limitations.

Jobim told the official Agencia Brasil news service last year that “there are South American countries that still are reliving their past and not building their future,” adding that, in the case of Brazil, he wants “energy spent on the future.”

Argentina’s Congress and Supreme Court in recent years overturned 1980s amnesty laws that had protected more than 1,000 members and agents of the military regime from prosecution.

Judicial rulings in Chile have essentially rendered a 1978 amnesty law a dead letter.

So-called “dirty wars” waged by security forces of Southern Cone dictatorships in the 1970s and 1980s resulted in the kidnapping and murder of tens of thousands of people, human rights groups say.

The bodies of many never were found, having been buried in clandestine graves or thrown from military aircraft into the ocean.

Tens of thousands of other real or imagined political opponents were tortured and imprisoned by the regimes.

Paraguay economy seen growing 4.2 pct in 2010 – gov’t
Reuters. December 29, 2009

ASUNCION, Dec 29 (Reuters) – Paraguay’s economy is seen growing 4.2 percent in 2010, spurred by what is expected to be a record harvest of soy, the country’s biggest export, the Paraguayan economy ministry said on Tuesday.

Global Markets

The forecast would mark a return to growth after projections the economy will shrink 3.8 percent this year, hit by the global economic crisis and a prolonged drought.

“The growth is expected largely because of a recovery in the agricultural sector, where a big jump in production is forecast,” Economy Minister Dionisio Borda told reporters.

Soy production in the world’s No. 4 supplier is expected to rise to 7 million tonnes from 3.9 million tonnes in the previous harvest.

Soy and beef exports are the engines of the Paraguayan economy, which grew by 5.8 percent in 2008.

The government has also said a planned $300 million public works program should help drive economic growth next year.

(Reporting by Mariel Cristaldo, Writing by Kevin Gray, Editing by Chizu Nomiyama)

México, Central America and the Caribbean [contents]

7,724 Slain in Mexico in 2009
Latin American Herald Tribune. January 2, 2010

MEXICO CITY – Last year was the deadliest in Mexico in the past decade, with 7,724 people killed in violent incidents attributed to organized crime, Mexico City daily El Universal said on Friday.

That total translates into an average of more than 21 homicides a day.

The newspaper, which has been keeping a daily tally of the number of deaths from Mexico’s drug war, said there have been 16,205 organized crime-related killings in Mexico since President Felipe Calderon took office in December 2006.

Chihuahua was far and away the most violent state in Mexico last year, with 3,250 murders, followed by Sinaloa (930), Durango (734), Guerrero (672), Baja California (444), Michoacan and Sonora, according to El Universal.

Mexican authorities do not provide homicide figures stemming from the cartels’ battles with each other and the security forces.

The Mexican government has deployed more than 40,000 soldiers and 20,000 federal police nationwide to combat the drug cartels and other organized criminal outfits in the country’s most violence-ridden states.

Among those killed last year were four town mayors and two retired Mexican generals, one of whom was serving as police chief of the Monterrey suburb of Garcia and the other as security adviser to the mayor of the Caribbean resort of Cancun.

Mexican drug traffickers in 2009 stepped up grenade attacks on police stations and military bases and armed attacks on police patrols, resulting in the deaths of 137 federal police officers.

While the government insists it is winning the war against the drug mobs and that the killings reflect their desperation as authorities close in on their operations, the levels of violence have steadily spiraled.

Armed groups linked to Mexico’s drug cartels murdered around 1,500 people in 2006 and 2,700 people in 2007, with the 2008 death toll soaring to more than 6,000.

For the second consecutive year, the dubious distinction of being Mexico’s murder capital went to Ciudad Juarez, a gritty metropolis just across the Rio Grande from El Paso, Texas.

More than 2,600 people were killed in 2009 in Juarez, according to tallies based on data from the Attorney General’s Office in Chihuahua state, and most of the slayings were related to battles among rival drug gangs for control of lucrative smuggling routes to the United States.

The figures mean that an average of seven people were murdered per day in 2009 in Juarez, compared with about 4.3 people per day in 2008, when more than 1,600 killings were reported.

One of the most widely publicized murders was the Nov. 13 slaying of journalist Armando Rodriguez, who had covered the crime beat for the local El Diario newspaper.

Violence against journalists forced five Ciudad Juarez-based reporters in 2009 to flee the country and request political asylum in the United States, due to threats or attacks targeting them or their family members.

Among the security forces, municipal police officers accounted for the highest number of murder victims with 25, followed by nine officers with the AEI Chihuahua state investigations agency, two federal police officers and three army soldiers.

The city saw an increase in killings in 2009 despite the presence of 8,000 federal police and army soldiers, most of them deployed to Juarez since February.

One of the deadliest incidents occurred on March 4, when 20 inmates were killed and five were seriously wounded in a prison fight over the distribution of drugs inside the facility.

Deadly attacks by cartel enforcers on drug-rehabilitation centers also made headlines last year.

A total of 18 men were killed in one attack on the El Aliviane clinic on Sept. 2, followed by another 13 days later on the Anexo de Vida facility that left 10 young men dead.

Cartel hit men also targeted Juarez nightclubs in 2009, with five people slain on July 17 at the Amsterdam bar, eight at the Seven & Seven bar on Aug. 17 and six at the Coco Bongo establishment on Aug. 29.

Mexican judge seeks release of US journalist murder suspect
AFP. January 1, 2010

OAXACA, Mexico – A Mexican judge has ordered the release of a man accused of killing a US journalist at a protest in Mexico three years ago, citing insufficient evidence against him, a defense lawyer said Thursday.

Juan Manuel Martinez Moreno was accused of the murder of Brad Will in Oaxaca, southern Mexico, and was detained on October 2008.

The lawyer, Gilberto Lopez, told AFP that Martinez could be freed in 15 days.

Federal judge Rosa Ileana Noriega ordered Martinez’s release on Wednesday saying that evidence against him “lacked validity,” Lopez said.

Amnesty International claimed in October that Martinez had been used as a scapegoat in the case.

Will, 36, died on October 27, 2006, as he was covering a street battle between armed government supporters and protesters led by the anti-government Popular Assembly of the People of Oaxaca.

Many rights groups, independent investigators and Will?s family believe a group of men who were widely photographed shooting in the direction where Brad stood are responsible for the crime.

Will, who worked for New York-based website Indymedia, had been documenting a teacher-led protest against governor Ulises Ruiz.

Mexico’s Supreme Court ruled in October that Ruiz was responsible for rights abuses during the 2006 protests, in which 13 people died.

The ruling does not carry any binding consequences or criminal penalty.

Honduras’ political crisis worsens its economic downturn
Xinhua. December 28, 2009

SANTIAGO, Dec. 28 (Xinhua) — The political crisis in Honduras “expanded” the impact of the global recession on Honduras’ economy, the Economic Commission for Latin America and the Caribbean (ECLAC) said Monday.

The Santiago-based ECLAC said that apart from the unstable political situation in the country, the military coup against ousted President Manuel Zelaya also had a negative impact on Honduras’ economy, which is highly dependent on external aid.

“Honduras is submerged in a deep political polarization, and strong restrictions on its economic growth are visible, which are the product of the events that occurred in 2009,” the ECLAC said.

From June 28 when the coup broke out till Nov. 30, Honduras had lost more than 1.1 billion U.S. dollars in aid, according to the Honduran Social Forum on External Debt and Development.

The domestic political stalemate has also diverted the country’s attention from revealing an anti-crisis plan against the backdrop of the global financial crisis.

Given the grave economic situation of the nation, the ECLAC noted that the new government, led by President-elect Porfirio Lobo who has not been largely recognized by the international community, would face a very difficult situation.

According to the ECLAC, the gross domestic product (GDP) of Honduras is expected to end the year 2009 with a contraction of 3 percent, against the previously forecasted growth of 2.5 percent.

Meanwhile, the Central Bank of Honduras (BCH) projected a worse outcome, between minus 1 and minus 2 percent, explaining that the Honduran economy as a whole had contracted by 3.2 percent from January to September.

Additionally, during that period, the country’s economy had decreased 34.7 percent in terms of the construction sectors. These sectors suffered a “lack of financing and the reduction of the capital incomes through the direct foreign investments” that dropped by 40 percent, the BCH added.

“It reflects the negative effects of the world recession, and the uncertainty produced by the internal political crisis,” the central bank explained.

Moreover, “due to the drop of the incomes and the impossibility of getting external financing,” the ECLAC said the internal debt has grown almost 80 percent.

Also, the lack of foreign investments and the 11 percent reduction of remittances contributed to a greater governmental deficit, which has risen from 2.4 percent of the GDP to 4.5 percent.

A drop in the imports of goods and services by 22 percent might also exacerbate the plight, while 650,000 people in the country are living in extreme poverty.

As for next year, Honduras has projected negative growth, and its external debt of 3.6 billion dollars has become almost unpayable.

Although the international community has promised Honduras a package of financial aid, Lobo stressed earlier this month that international aid worth at least 2 billion U.S. dollars would be at stake if the political crisis in his country was not solved.

The fund, according to the president-elect, was related to the aid programs of many countries and organizations, including the Central American Bank for Economic Integration (CABEI) and the Inter-American Development Bank (IDB).

Violence hits critics of mine proposed by B.C. firm
Canwest News Service. December 31st, 2009

Three activists opposed to a mine proposed by a Vancouver-based company in El Salvador have been killed, two in the past 10 days.

Pacific Rim Mining Corp. had hoped to develop its El Dorado gold mine, approximately 65 kilometres east of the country’s capital San Salvador, but has been unable to obtain the necessary permits, according to the company’s website (The company did not respond to voicemail messages asking for comment). As a result, in July 2008 the company decided to stop all drilling in the area.

Yet despite the lack of activity, tension between the anti-and pro-mining groups appears not to have abated. In the last 10 days, two members of Cabanas Environment Committee, an environmental group opposed to the opening of a mine, have been killed. Dora Recinos Sorto, who was eight months pregnant, was killed on Saturday. The youngest of her six children, a son whose age has not been confirmed, was shot in the foot. A second activist, Ramiro Rivera, was killed Dec. 21. Another anti-mining activist, Marcelo Rivera (no relation) was kidnapped and killed in June, according to news reports.

The presence of Pacific Rim “has really split a community which has a long history of violence,” said Clinton Carter, a consultant with Washington, D.C.-headquartered Frontier Strategy Group, which helps companies assess the risk of doing business in emerging markets.

Some groups would support the mine and they would view the anti-mine activists as jeopardizing their livelihood, Carter said. “That is the kind of very tricky local situation that these companies are wading into,” he said.

That’s especially true in a small community where there are big expectations about what jobs and income a mine could bring, Carter said.

“So if there is a very vocal faction opposed to it sitting alongside those who are suffering pretty high unemployment and pretty low standards of living, I think that has a potential to really polarize communities.”

And that would be something Pacific Rim “wouldn’t be able to control or predict,” he said.

Pacific Rim owns two other properties in El Salvador. But according to its website, the company does not intend to resume significant exploration programs in El Salvador until the El Dorado permits are received. “The Company cannot judge if or when the required permits will be received and is not currently planning any exploration programs for its El Dorado, Santa Rita and Zamora-Cerro Colorado properties for fiscal 2010 beyond what is necessary to keep all of its exploration licences in good standing,” a document on its website said.

Pacific Rim has also commenced an arbitration against the Salvadoran government seeking damages for its failure to issue the permits needed.

A Black Market Finds a Home in the Web’s Back Alleys
MARC LACEY. The New York Times. January 3, 2010

HAVANA – On one block on the outskirts of the Cuban capital, a mother of two goes door to door selling hair ribbons and other sundries to her neighbors. An old man sells cookies and candies to those who ring the bell at his dilapidated home. A grandmother fills up empty beer cans with low-budget rum, which she sells in the evenings to help make ends meet.

Such entrepreneurship is outlawed but thrives nonetheless, and right under the noses of the block captains who are supposed to report such transgressions to the Communist Party chain of command.

These are tough economic times in Cuba, and while the black market has always bustled here it seems particularly intense these days, with enterprising Cubans in a constant search of compatriots who have money to spend.

There are no classified advertisements in the Communist Party newspaper Granma or the other state-run publications that circulate in Cuba. Rather, sales are made through Radio Bemba, which is not a radio station at all but the country’s extensive gossip network, which takes its name from the Spanish word for lip.

Two Cubans in their 20s who left the island for Spain have created a way to make all this secretive selling easier. It is a type of Cuban Craigslist, which allows the small but growing number of Cubans with access to computers and the Internet to buy and sell with less sneaking around.

But the authorities, despite loosening restrictions recently on the sale of computers, have repeatedly blocked access to their Web site, Revolico, whose name means commotion. One of the programmers who created the site ( said in an e-mail message that he and the co-founder were in a constant scramble to get their site past government censors.

“We chose the name to make an allusion to the disorder that we are trying to organize,” said the programmer, who spoke on the condition of anonymity so that his relatives still on the island would not encounter problems with the Cuban authorities.

Although he said that Craigslist was the inspiration for Revolico, the Cuban site is designed to upload more quickly on the island’s sluggish connection speeds. And although some of the categories on the site – cars for sale, computers for sale, boys seeking girls, boys seeking boys, for instance – are identical to those on Craigslist, there are many particularly Cuban exchanges.

Take the person selling his place in the visa line at the Spanish Embassy to someone trying to leave the island. Or the arranged marriages that are offered to help Cubans find a way to another country.

Or all the classic cars, like a 1950 Dodge, a 1956 Chevy or a 1954 Buick, all still running after having been cobbled together with makeshift parts for more than half a century.

There is clearly a market for the site, as viewership both on and off the island has steadily climbed and banner advertising, priced in euros, brings in modest sums. The site, which went online in December 2007, is currently accessible outside Cuba as well as to Cubans who use special software to get around the blocking. In January 2008, there were 336,595 page views. That increased to 1,331,161 by January 2009. By August 2009, Revolico said its viewership exceeded two million hits monthly.

The offerings on this online bazaar run the gamut, although it is impossible to tell which sellers are legitimate, which are scam artists and which might even be government agents setting a trap. A recent posting offered illegal satellite dishes, which the authorities occasionally seize from rooftops to prevent outlawed foreign broadcasts from finding their way into Cuban homes. Also for sale were English classes, old typewriters, sex toys, purebred dogs and tooth whitening chemicals. People with permission to travel were sought out to buy clothing, electronics and other goods to bring back in their luggage.

The founder said he had heard of Cubans practically making a living by buying and selling items through Revolico. A regular customer said he bought Windows 7 from the site for about $5. After calling the number in the Revolico advertisement, a young man showed up at his front door and installed the pirated software on his home computer.

The founder said, “In Revolico, one sees Cuba exposed, the daily lives of the Cubans, things that say much about the Cuba of today.”

NY-based attorney sceptical about IMF deal
Harold G Bailey. Jamaica Observer. January 02, 2010

NEW YORK, USA – Donald P Vernon, the Jamaican attorney who heads Vernon and Associates – a New York-based law firm – is not so sure his country’s decision to return to the International Monetary Fund (IMF) “is such a sound one”.

He is among a growing list of Jamaican nationals here who are not only sceptical, but worried about the impact that the decision will have on their homeland, even as they acknowledge the financial dilemma their country faces.

Jamaica and the IMF have been negotiating a new standby agreement worth US$1.2 billion since August, and are believed to be close to inking that agreement. Jamaican authorities have repeatedly claimed that the country has no alternative, but to seek the IMF’s assistance.

But, critics like Vernon point to the harsh conditions likely to be imposed by the IMF, as evidenced by the sweeping tax increases – since reversed – announced just over a week ago. They also worry about pending cuts in the public sector workforce on top of those who lost their jobs due to the recession.

Vernon, who also runs Caribbean Centre for Progress, a non-profit organisation which helps Diaspora residents to establish their own non-profits, “fears any IMF agreement will only bring more woes than good”.

He pointed to his country’s previous agreements with the fund, and asks pointedly: “What do we have to show for those sacrifices?” He also dismisses claims that the IMF is more compassionate than previously, saying there is no evidence to support that notion “nor does it resonate well among my countrymen here”.

Like many others, Vernon wants to see a broad-based National Development Prorgamme with requisite incentives designed to spur growth.

IMF Recapitalizes The Caribbean
Oxford Analytica. January 1, 2010

The region must align these loans’ conditions and its countries’ needs and policies.

Since 2008, six English-speaking Caribbean countries–Belize, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines–have received financial assistance from the IMF to help cope with the effects of external shocks, including the global recession, that are affecting tourism, economic activity and government revenue.

Other shocks have included hurricanes, floods and the collapse of CLICO, a Trinidad and Tobago-based insurance company with banking and insurance subsidiaries throughout the Caribbean, as well as banks in Antigua and Grenada. When discussions on an IMF loan with Jamaica are concluded, seven of the 12 independent English-speaking Caribbean Community (Caricom) countries would be active or recent recipients of IMF financial support; Antigua and Barbuda, which have also had loan discussions, could raise that number to eight.

IMF Assistance
Most of the recent loans were arranged under the Rapid Access Component of the IMF’s Exogenous Shocks Facility (ESF) and the facility for emergency assistance following natural disasters, both of which provide low-interest and rapidly disbursed financial support:

–The loans involved little conditionality, with governments committed only to taking appropriate measures to address the shocks.

–However, disbursements have been small, ranging from about $3.5 million in the case of Saint Kitts and Nevis to $10.7 million for Saint Lucia, or between .5% and 1.5% of GDP. Overall, IMF support under the ESF and the emergency assistance facility to the members of the Eastern Caribbean Currency Union totalled about $25 million in 2009–about 3% of the union’s reserves held at the Eastern Caribbean Central Bank.

–In the case of Belize, emergency support was equivalent to .5% of GDP and less than 5% of central bank net international reserves.

Oversight Role
The IMF’s resurgence in the Caribbean highlights a number of concerns for the region. One of these relates to the relatively small size of recent IMF loans, which points to the fund’s continued role not as a major source of finance, but rather a body to which lenders and donors turn for assessments of whether financial support should be released or delayed:

–This role is explicit in IMF documents, such as the July 2009 report on Saint Lucia, which notes that access to financing would signal endorsement of the authorities’ policy agenda and be a key catalyst in securing funding from the Caribbean Development Bank (CDB), the World Bank and other donors.

–This can also be seen in the IMF’s recent report on Saint Kitts and Nevis, where a summary of the conditions for disbursement of a policy loan from the CDB includes a requirement that the IMF have no objection to the fiscal policy stance and policy arrangements.

–The June 2008 IMF report on Grenada refers to delays in the disbursement of E.U. grants pending the completion of the first review of performance under the PRGF loan.

Continued use of what can be viewed as a variant of cross-conditionality raises concerns that countries that would not otherwise approach the IMF might nevertheless do so because of pressure from lenders and donors. Such pressure is likely to undermine ownership of IMF programs. The dependence on the IMF for signals also raises the question of why assessments of the appropriateness of fiscal or other policies may not be made independently by donor agencies and lending institutions.

In seeking a way out of this conundrum, a useful first step might be for the Caribbean and its development partners to reach agreement on a policy along the lines of that adopted by the U.K., which seeks to avoid the automatic linking of Department for International Development assistance to IMF programs.

A related concern is that as access to low-conditionality financing for external shocks is exhausted, future IMF loans will carry tighter policy requirements. A challenge arising from this will be how to ensure coherence between the conditions attached to IMF loans and the coordination of policies among countries that is required under the Caribbean Single Market and Economy.

In the face of continued vulnerability, the region may consider an approach combining the centralization of the various forms of emergency assistance with negotiations aimed at delinking donor and lender support from IMF assessments and programs.

Haiti’s president promises fair election
AP. January 1, 2010

GONAIVES, Haiti — Haitian President Rene Preval has used his Independence Day speech to pledge that upcoming legislative elections will be fair.

But the Friday speech did not address the disqualification of 15 political groups that has prompted international criticism and opposition threats to try to disrupt the Feb. 28 vote.

The opposition accuses the presidentially appointed electoral council of favoring Preval’s new Unity party.

Preval’s speech also promises to focus the last of his five-year term on restoring agriculture, electricity and roads in the impoverished Caribbean country.

The annual address in Gonaives marks Haiti’s Jan. 1, 1804, independence from France after a slave revolt.

Venezuelan-Cuban Firm to Build Airport in Northern Haiti
Latin American Herald Tribune. January 2, 2010

PORT-AU-PRINCE – Haitian authorities confirmed on Friday that a Venezuelan-Cuban firm will build a modern, international airport in the northern city of Cap-Haitien.

Public Works Minister Ronald Baudin said the government will take all necessary steps to monitor the infrastructure project, whose $33 million cost will be financed through a loan from Venezuela on favorable terms.

“The government has been assured that no irregularities will mar the handling” of these funds, the official added.

The agreement with Caracas was unanimously approved Tuesday by Haiti’s National Assembly.

The lawmakers approved the loan despite concerns about whether all proper procedures were followed in selecting the company, whose name has not been made public.

The chairman of the Finance Committee in the lower house, Jean-Marcel Numerant, questioned whether the company that is to carry out the work was chosen on the basis of a fair and competitive selection process.

Officials said the new airport’s runway will be built on a 2,652-meter (8,695-foot) surface area and will receive international flights.

The terminal also reportedly will be equipped with modern air-traffic control and safety systems.

It will take 18 months to build the facility, although no specific date has been given for the start of construction or for when the new airport for Haiti’s second city will begin operating.

Haiti currently has just one international airport, the Toussaint L’Ouverture, which is located on the northern outskirts of the capital, Port-au-Prince.

During a recent visit to the country in October, the U.N. special envoy for Haiti, former U.S. President Bill Clinton, said a new international airport in Cap-Haitien was badly needed to boost tourism development in the region.

Region: Trade, Security, Economy and Integration [contents]

U.S. diplomacy stumbles in Latin America
Paul Richter. Los Angeles Times. January 3, 2010

Reporting from Washington – Just eight months ago, President Obama was calling Brazilian President Luiz Inacio Lula da Silva “my man” and suggesting that the South American country could become a leading U.S. partner in the region.

Since then, Brazil has criticized the U.S. approach to the coup in Honduras and warned the United States over plans to expand its military presence in Colombia.

U.S. officials, for their part, have complained about Lula’s increasing efforts to form economic and political ties with a leading American adversary, Iranian President Mahmoud Ahmadinejad.

“Stop punishing him,” Lula shot back a few months ago.

The differences with Brazil underscore how the Obama administration’s Latin American relations have become marred by tensions and suspicions.

Polls indicate that Obama remains highly popular with Latin Americans, but his administration’s relationship with some regional governments has been tested by a series of developments. Those include the June 28 military coup that toppled Honduran President Manuel Zelaya, a deal with Colombia giving the Pentagon use of seven bases for flights to combat drug trafficking and insurgency, stalled free trade deals, and Iran’s growing ties with Brazil, Venezuela and Bolivia, among other Latin American countries.

Another area of tension is the anti-drug fight. Although U.S.-Mexican cooperation remains broad, Central American and Caribbean countries are increasingly complaining that they receive less help than they need, and there are growing cries for the United States to do more to lessen demand at home, said Daniel Erikson of the Inter-American Dialogue, a think tank that specializes in Latin American issues.

Latin American leaders who hoped to move up the U.S. priority list have discovered that the new president, like his less popular predecessor, has most of his foreign policy attention focused elsewhere — namely Afghanistan and Iraq.

“The administration created expectations that were enormous, but sooner or later reality was going to catch up,” said Juan Carlos Hidalgo of the Cato Institute in Washington, D.C. “That’s what happened.”

It was always probable that the Obama administration would come into conflict with Venezuelan President Hugo Chavez and the allied left-leaning governments of Cuba, Bolivia and Ecuador. After some early praise, Chavez has been critical of Obama, declaring recently, in a message carried by state media, “the Obama illusion is over.”

But the United States has had differences with governments closer to the center, too. These nations have been pleased with Obama’s calls for closer consultation, and his moves to wind down the U.S. mission in Iraq — a major element in the hemisphere’s unhappiness with President George W. Bush.

But many governments were unimpressed with U.S. efforts to negotiate Zelaya’s reinstatement in Honduras.

Brazil, Argentina, Venezuela and others have refused, despite U.S. urging, to recognize the Nov. 30 presidential election won by wealthy rancher Porfirio Lobo. The governments contend that supporting the new Honduran leadership could encourage coups in other countries.

In early December, the Honduran Congress voted that the coup that deposed Zelaya should stand, favoring a motion against reinstatement by a vote of 111 to 14.

A senior administration official, who asked to remain unidentified because of the sensitivity of the subject, said that “there is more consensus on the future of Honduras than it appears.” He said he believes many countries share the view that the new Honduran government should include officials from both ideological poles, and expressed optimism that such a unity slate would be organized.

Another divisive issue is the 10-year deal signed Oct. 31 involving the bases in Colombia. Though it won’t increase the number of U.S. personnel in the country, it raised fears even among U.S. allies Chile and Brazil that the American military presence might spill over Colombia’s borders. Lula asked for assurances that U.S. forces would stay put.

In the case of Cuba, the Obama administration eased its opposition to the country’s entry into the Organization of American States and made a limited gesture toward normalizing relations by reducing restrictions on Cuban Americans’ travel to the island.

The consensus in Latin America calls for a complete lifting of the long-standing economic embargo.

“The general reaction was that it was too little,” Hidalgo said.

The U.S. official said Latin American leaders have been sympathetic to Obama, recognizing “the enormous challenges this president faces, including the worst recession since the ’30s.”

Peter DeShazo, a former State Department official now at the Center for Strategic and International Studies, said many of the core U.S. goals would be unchanged — increasing security cooperation, trying to reform governments, fighting poverty and developing economies.

“There will be greater continuity than a lot of people expected,” he said.

“Those who expected a sea change were misleading themselves.”

In the next decade, I hope Latin America will continue to fight back
Marianella Yanes Oliveros. The Guardian. January 1, 2010

When the first European sailors weighed anchor in the Caribbean Sea, the chronicle of slavery and death in the three Americas began to be written. It was the first invasion, the first act of pillage. Since then, the weapons of conquest have changed. Sucessive US governments and transnational oil, communications and arms corporations have used fleets and military coups, intelligence and the media, to ensure their control over the world’s natural resources. But they are not exploited in order to feed the hungry or provide health or housing for the poor. On the contrary, the aim is to intensify economic exploitation. The so-called Free Trade Agreements, for example, only condemn those who sign them to even greater subservience.

Nevertheless, the struggle of the peoples of the Americas for their right to self-determination and control of their resources has produced many revolutionary processes in the early 21st century, their roots in the work of anti-capitalist organisations and activists, as well as peasants, landless workers, base communities and oil workers. The coup against Zelaya in Honduras was a response to his intention to change the constitution and to join Alba, the Bolivarian project for the integration of the Americas launched in 2001, whose first signatories were Cuba and Venezuela. Unlike the US-backed Free Trade Area (FTAA), Alba “is a strategic political alliance whose purpose is to harness the skills and strengths of its members with the aim of transforming our societies to produce the integrated development of free and just nations”. The countries that decided to introduce new socialist constitutions have been victims of coup d’etats – Venezuela in 2002, Bolivia in 2008, and most recently Honduras.

Latin America’s future will be intimately connected with its energy resources. The world’s largest reserves of oil, gas and water outside Russia and Iran are in the south. It is no coincidence that the US fleet is now in the Caribbean, while military bases in Colombia and Curacao supposedly waging war against drugs and terrorism threaten Venezuela and Ecuador. Bolivia has had to confront an extreme rightwing bent on separating the Media Luna provinces, with their bottomless reserves of hydrocarbons, from the rest of the country.

The key to the next decade are the proven reserves of oil (over 314bn barrels) in the Orinoco Basin in Venezuela, and Bolivia’s enormous reserves of gas, while Brazil’s huge energy reserves, including Amazonia, the world’s largest water source, are well documented. And Argentina and Uruguay could easily satisfy the food needs of the whole continent.

For the first time these countries are forming alliances and making agreements between themselves, changes that conflict with the appetites of the transnationals. The Alba project involves exchanges of energy for food, a Latin American currency, the creation of a Banco del Sur and discussions about external debt. Venezuela’s educational and health initiatives threaten imperialist interests by replacing paternalism with consciousness and activism. The next generation of Latin Americans will be much more independent and have a deeper sense of their own reality.

In 2010 oil production will reach its peak; after that there will be significant reductions, affecting the price of crude oil. The biggest oil consumers are the developed countries in the International Energy Agency; they are all experimenting with alternative energies, but there is none cheaper than oil and gas, especially as hydroelectricity is affected by the shrinking water tables. Thus there will be a permanent campaign to discredit OPEP as an organisation that protects oil producing countries; news reports always refer to it as a cartel, even though it only regulates production not the oil price.

The US will continue to bombard the southern Americas, not with bombs but with a more dangerous weapon – support for the Latin American right. Coup makers, terrorists and rightwing politicians – such as Luis Posada Carriles and Manuel Rosales – tour America, denouncing the progressive movements of Latin American people.

But Latin America’s revolutionary processes are producing new paradigms and changing the relationship between people and the Earth. Now people speak of Pachamama – Mother Earth – and the need to protect and conserve it through equity, integration and respect for the self-determination of peoples. Energy and water forums meet to control consumption; a new consciousness is growing.

In the decade to come there will be major contradictions to overcome, like the capitalist legacy of corruption and bureaucracy. But at the same time, the effects of the first decade’s investments in health and education will begin to be seen, to the benefit of those long forgotten by the capitalist system. The organisations of the people are a fact and they cannot be held back. As the slogan shouted by men and women all over Latin America has it: “Beware! Bolivar’s sword is sweeping the continent.”

• Translated from Spanish by Mike Gonzalez


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