Ibero-American News Digest
Who's Out To Blow Up the Lula Government?
Veja magazine, one of Brazil's leading national weeklies, set off a stinkbomb under the Lula government in its March 16 issue, when it ran a cover story on allegations that the Colombian narcoterrorist FARC financed President Lula da Silva's Workers Party (PT) party in the 2002 elections, which put him in office.
The story is based on purported documents of the Brazilian Intelligence Agency (ABIN), which detail discussions at an alleged April 2002 meeting between 30 or so PT'ers and the FARC's infamous "ambassador" to Brazil, Oliveiro Medina, where Medina is said to have offered $5 million to help the PT's election campaign. The money was to be conduited through Trinidad and Tobago, to 300 "small businesses," and then given to PT candidates.
Radical elements of the PT do have ties to the FARC, but the Veja story takes aim at the Lula government itself, which refused to play the role of FARC protector, as some Jacobins had hoped it would. While the Lula government has yet to break from its firm adherence to an IMF policy domestically, it is rightly viewed by financiers as far from secured on their sinking Titanic. How interesting that now, as the system is coming down, someone decides to leak a purported investigation from two years ago.
Veja admits in the article that no FARC financing was ever confirmed, adds that the ABIN has often been wrong, but demands an investigation. The Brazilian Social Democratic Party (PSDB) of Lula's predecessor, Fernando Henrique Cardoso, didn't look a gift horse in the mouth, and has demanded Congressional hearings, while threatening to set up a Parliamentary Inquiry Commission (CPI), with subpoena powers, to look into PT-FARC ties. PSDB Senator Tasso Jereissati warned on March 14 that if the report were confirmed, "there will be an institutional crisis," given that the FARC is the most violent and criminal movement in Ibero-America.
The PT issued a furious denial of what they consider a black operation. The PT Secretary of International Relations, Paulo Ferreira, pointed out that the PT won the hatred of the FARC, when it supported a resolution calling for the Colombian guerrillas to be excluded from international meetings. Influential PT Sen. Aloisio Mercadante said he doubted that the financing had occurred, but should anyone in the PT were found to be involved, they would be expelled.
Brazil Enters the Global Financial Whirlwind (Again)
J.P. Morgan jacked up Brazil's country-risk rating by 7% over a three-day period, such that, by March 16, it was set at 430 basis points. Thus, the government and companies now have to pay a minimum premium of 4.3% over the cost of U.S. Treasury bills, on new bond issues. Other foreign financier agencies also lowered the ratings on Brazilian debt at the beginning of March, citing the increasing danger of capital flight from the developing sector generally.
Under new Central Bank regulations which went into effect on March 14, Brazil is more vulnerable to capital flight than ever. Limits as to the amount of money which can be sent out of the country were removed, along with requirements for documentation as to the source of the money. "What is underway, in a few words, is the legalization of capital flight," economist Paulo Nogueira Batista, Jr. warned on March 11 in a Jornal do Brasil op-ed.
On March 16, the Central Bank also raised the benchmark interest rate by another 0.5%, to 19.25% a year. The average interest rate for consumers is now estimated at the fine usurious rate of over 147% a year, and for businesses, at 73.52% a year.
Chile Warns Against 'Regime Change' in Venezuela
Having learned precisely nothing from the strikingly unified South American response to the Colombia-Venezuela crisis this past January, the Bush Administration is escalating its campaign against the Venezuelan government of Hugo Chavez.
Undersecretary of State for Latin American Affairs Roger Noriega's March 9 testimony before a U.S. Congressional committee typifies the drumbeat coming out of Washington, that Venezuela's neighbors are expected to do things Bush's way. "We want Venezuela's neighbors and others in the region to understand the stakes involved and the implications of President Chavez's professed desire to spread his 'Bolivarian' revolution," Noriega warned. "Should the U.S. and Venezuela's neighbors ignore President Chavez's questionable affinity for democratic principles, we could soon wind up with a poorer, less free, and hopeless Venezuela that seeks to export its failed model to other countries in the region."
That Ibero-Americans have a very different view of how to handle Chavez, was reflected in the March 9 address by Chilean Foreign Minister Ignacio Walker at the Inter-American Dialogue headquarters in Washington. Walker warned the Bush Administration that "isolating and punishing" the Chavez regime simply "won't work.... I would tell my friends of the United States to avoid simplistic opinions. Sometimes, we find much rhetoric, a lot of simplistic opinions that don't take into consideration the true complexity of the process." We should help Venezuela along the paths of law, human rights, and democracy, said Walker, adding: "We are going to find these paths with Venezuela, and not against Venezuela."
Argentina Tells IMF To Shove It
"Your advice isn't needed," President Nestor Kirchner told IMF Managing Director Rodrigo Rato on March 15, after Rato ordered the Argentine President to lay down rules which are "clear and respectful" of foreign investment and "private property." Referring to Kirchner's announced boycott of Royal Dutch Shell, and subsequent fines imposed on both Shell and Esso for raising gasoline prices, Rato indicated on March 14 that, "of course," Argentina's "respect" for private looting would be a conditionality of any future accord with the Fund.
Kirchner wasn't having any of this. He told an audience gathered at the Casa Rosada on March 15, that "after everything that's happened to us with the Fund, I will say this with restraint: We are an independent nation which knows how to govern itself, and this advice is unnecessary. We want investment from all over the world, but we don't want this type of tutelage." Kirchner pointedly stated, "we have had Oriental-style patience." Rato could spend his time more usefully "thinking about how to really help Argentina.... Let us see if Dr. Rato can show a gesture of solidarity with this population which is moving forward by itself; let's see if, once and for all, he can make a gesture of reconciliation with the country, which has suffered for so long...."
New Uruguayan Foreign Minister Pushes Ibero-American Integration
"To have a clear idea of what I am thinking: I believe we are living through an exceptional historical moment; this is the richest continent on the planet; it has absolutely everything: oil, gas, cattle, fish, minerals, food. I have described as 'infamous' the fact that in a continent with such wealth, that of 400 million inhabitants, 200 million are living in poverty. It is an insult to the dignity of man," Uruguayan Foreign Minister Reinaldo Gargano told French daily Liberacion in a Feb. 4 interview, prior to his assuming office on March 1, with the assumption of the Tabare Vasquez government. Gargano is a former Senator and head of the Socialist Party of Uruguay, and he has made clear in a series of interviews, that he intends to foster the integration of Ibero-America.
Asked by Liberacion to comment on the failures of the outgoing government, Gargano instead observed that in the 1990s, his movement factionalized within the leftist Frente Amplio coalition for "the concept that the process of Latin American integration has to take place above and beyond the governments in power, with the understanding that they will necessarily change," through the process of integration itself. Mercosur was a good first step, "to then be extended to all of South America and Latin America, if possible." Yet, under the outgoing government, "Uruguay didn't even seem to be committed to the South American Community of Nations, launched in Peru last December, which was the work of 15 years!"
Asked what his mission as Foreign Minister will be, Gargano answered that he expects to achieve "decisive steps" from which there will be no turning back in the march toward Ibero-American integration. To deal with the neoliberal legacies of previous governments, the countries of Uruguay, Brazil, Argentina, Chile, he said, need more than the palliatives of import substitution, or "zero hunger." Rather, theyand the rest of the continentneed "sustained economic development," defined as "gaining a quality of life, producing manufactures, cars, point technology, capital goods, South American infrastructure that can go from the Pacific to the Atlantic, from the Caribbean to Tierra del Fuego, the whole continent. We must begin there...."
Operation Condor Pedophile Ring Busted
Nazi pedophile Paul Schaefer, a key cog in the Operation Condor apparatus exposed in this week's Indepth section, was arrested in Argentina and deported to Chile on March 13. A fugitive for nine years, former Nazi SS officer Schaefer is wanted in both Germany and Chile on charges of pedophilia, as well as for crimes of murder, kidnapping, torture and disappearances which took place at his protected "Colonia Dignidad" in Chile. The latter was the site of a cult of German-Chilean citizens (themselves victimized by Schaefer and his lieutenants) at which Augusto Pinochet's secret police, the DINA, set up an intelligence brigade, trained its agents, and tortured and murdered captured opponents.
Schaefer arrived in Chile in 1961.
Between 1968 and 1999, Chilean state agencies and Congressional committees produced at least 18 investigative reports on the brutal workings of Colonia Dignidad, in addition to others issued by the German Bundestag. Yet throughout this periodparticularly under PinochetSchaefer's Colonia Dignidad operated with impunity and received state subsidies, protected by a broad network of politicians, judges, military, and others, which former Chilean police intelligence agent Luis Hernandez warns is still "intact" today, although in weakened form. Schaefer was an intimate of DINA chief Gen. Manuel Contreras, for whom he reportedly laundered money, and kept large sums of money deposited in several offshore banking centers.