Ibero-American News Digest
Will Argentina's Kirchner Stop Paying IMF?
Flying to Germany on April 11 for a five-day state visit, Argentine President Nestor Kirchner was reported to have told close aides, that if the International Monetary Fund didn't stop its blackmail of Argentina, his government would cease to treat the IMF as a "privileged creditor" which gets paid first, and instead, "prioritize payments to those bondholders who accepted" the government's bond swap. Argentine daily Clarin's April 13 headline summarized the implicit threat: "Kirchner studies suspending payments to the IMF if there is no agreement."
Argentina has paid some $12 billion in debt since its December 2001 default, and owes at least another $12 billion. Should it decide not to pay the IMF, it could pull the plug on that bankrupt institution.
The IMF is telling Argentina that it will not sign a new agreement with the country, until it cuts a deal benefiting the foreign vulture funds and speculators that refused to participate in the government's original offer. Kirchner reiterated to aides on the flight that the recently negotiated bond swap, which offers 30 cents on the dollar for defaulted bonds, "will not be touched." Instead of paying the "privileged" IMF, he said, he would prefer to focus on those 76.6% of bondholders who decided to participate in the official debt restructuring.
Kirchner followed with a dramatic speech to the Friedrich Ebert Foundation in Berlin on April 14, in which he charged that "genocidal" policies imposed by the IMF upon Argentina, had brought about "one of the worst socio-economic catastrophes of its history, a catastrophe which exploded in 2001." This catastrophe, he said, was the product of "a political economic model at the service of interests foreign to the common good, which favored the proliferation of the corrupt, genocidalists, and thieves." The IMF "should be restructured," he told his German audience. Argentina will "participate in an active and constructive way on behalf of a new world economic order, without renouncing any autonomy in its decision-making."
Before that speech, Kirchner held a very positive, working meeting with German Chancellor Gerhard Schroeder.
Bush Administration Failed to Impose Candidate on OAS
The inability of the Bush Administration to impose its candidate for Secretary General upon the Organization of American States (OAS) on April 11, is the latest demonstration sign of how the Administration is losing control, less than six months after its alleged 2004 electoral "triumph." This was the first time, in at least 30 years, that the OAS had failed to elect the U.S.-backed candidate as its chief.
The Bush Administration had campaigned, in its typically nasty fashion, for months, to line up support for former Salvadoran President Francisco Flores, an abject Bush lackey, but three days before the OAS vote, the Bush team acknowledged that their man had no support, and had him withdraw. Determined to block the Chilean candidate supported by the majority of South American countries, the U.S. threw its support behind a Mexican candidate.
That failed, too. At the Extraordinary Session of the OAS on April 11, the Foreign Ministers voted five times for a new Secretary General, and five times the result was a tie (17-17). The election was then rescheduled for May 2, leaving time for pressure tactics, horse-trading, and even new nominations.
The Mexican candidate, President Vicente Fox's Secretary of Foreign Affairs Ernesto Derbez, is identified as the candidate of the NAFTA countries and the political supporters of the Free Trade Agreement of the Americas (FTAA); the other contender, Chilean Interior Minister Jose Miguel Insulza, is supported by the bloc that was most active in the formation of the South American Community of Nations, the Brazilian-led initiative which looks to integration of infrastructure as a path to peace.
Chilean Trade Union Federation Mobilizes for Justice, Real Democracy
Chile's Unified Labor Federation (CUT) called in foreign correspondents on April 11 for a briefing on their strategy for a year-long mobilization to bring real democracy to Chile, the "model" free-trade country where the labor, political, and economic conditions continue to be essentially those created by George Shultz's Pinochet dictatorship. CUT President Arturo Martinezbest known for his appeal to the U.S. Congress to reject a fascist pension plani.e., privatization of Social Security, based on the Chile modelcirculated throughout the United States in a LaRouche PAC pamphlet, described the stark reality of life in Chile which they are fighting to change.
The CUT intends to have 60-70,000 people at the May 1 Labor Day demonstration this year, Martinez said, a huge jump over what they have mobilized in recent years. This will be a year of assemblies, mobilizations, and perhaps a national strike, he said, because we have to begin "to demonstrate power."
Chile is a nation of frightened people, he said. "When the electricity gets cut in Argentina, people go out to protest; in Chile, we go out to buy candles. We live in a society of fears.... They pacified us and domesticated us through the market, and with the credit cards to which we are indebted five times more than we make. We are afraid that we can't pay our debts at the end of the month; that we will be fired; that some member of the family may become ill, because health care is so expensive; afraid of not being able to educate our children; afraid of old age, because pensions are miserable."
Despite its "macroeconomic indicators," Chile will never become the developed country its leaders proclaim, until the huge gap between rich and poor is breached, he said. Half a percent of our 15 million inhabitants are very rich, and hold all the power. Another 10% are moderately rich, and the rest of us are indebted.
The CUT is stepping forward to secure the changes needed to open up the political system and secure collective bargaining, dignified pensions, and justice for labor.
Synarchists Move To Block Mexican Presidential Candidate
After months of expectation, Andres Manuel Lopez Obrador, Mexico City's Mayor, and foremost Presidential candidate in next year's elections, was stripped of his legal immunity on April 7 by an unholy alliance within the Mexican Congress of all but 12 members of the opposition PRI party, and all the ruling PAN party members, making 360 votes against 126. Some 300,000 Mexicans or more demonstrated in the Zocalo (the central plaza) of Mexico City in protest, as the vote was counted.
The move permits Lopez Obrador to be tried on charges of contempt of court, stemming from the city government's having disobeyed a court order against building a hospital access road through a certain property. In addition to being stripped of his immunity, he has also been dismissed as Mayor. He will be tried, and if found guilty by the courts, his Presidential candidacy could be blockedwhich is obviously the point of this whole process.
Lopez Obrador is the leading candidate from the PRD party. He repeated to his supporters on April 7, that he will continue his campaign from jail, if that comes to pass, and shouted a slogan from President Benito Juarez during the War of Reform against 19th-Century Synarchists: "The triumph of the reaction is a moral impossibility."
Central America Needs a Marshall Plan, Not Free Trade
Guatemalan Bishop Alvaro Leonel Ramazzini Imeri asked the U.S. House of Representatives Subcommittee on the Western Hemisphere April 13 not to approve the Dominican Republic-Central American Free Trade Accord, commonly known as CAFTA. What Central America needs, instead, he suggested, is a Marshall Plan. With 80% of the Guatemalan people living in extreme poverty, having no access to education, and 69% of Indian children in the countrya major portion of the populationbeing undernourished, it is not possible to speak of Guatemala being "competitive."
AFL-CIO Vice President Linda Chavez also told those hearings that the CAFTA "would further oppress the Central American workers and their salaries," while costing the U.S. more jobs. She gave the figure of 900,000 U.S. workers who have lost their jobs over the 10 years of NAFTA.
U.S. supporters of CAFTA are sure of only about 80 firm votes in the House, well short of the 215 needed, and their hope of building momentum for CAFTA in the Senate was dealt a blow at Senate Finance Committee hearings April 12, when several Republican Senators sharply complained about the accord's provisions.
Brazilian Central Bank Chief Under Fire Again
Brazilian Central Bank chief Henrique Meirelles will face charges of tax evasion, illegal international money transfers, and election-law violations, if the Supreme Federal Court (STF) approves Prosecutor General Claudio Fonteles' April 3 request for an investigation to be opened into Meirelles for such crimes, allegedly committed when he was the international president of BankBoston, before moving to the Central Bank.
This is a hot one. Key institutional forces in Brazil would like to oust Meirelles, for his policy of usurious interest rates, in particular. But, the Lula government has been warned by foreign financial interests that Meirelles is considered the "guarantee" that the government will keep playing by the rules of their game.
On April 10, Vice President Jose Alencar, serving as Acting President while Lula da Silva visited Africa, jumped in to demand a change in economic policy from the Central Bank. The bank's insane metric of "fighting inflation," should be replaced by the metric of economic expansion and "maximum job creation." Alencar told reporters. Brazil needs "to grow," in order to have resources to invest in education, health, and security. "All the public services, throughout Brazil, need more resources to improve their quality.... All of them are inadequate, because they lack resources. And why do they lack resources? Because there is little growth."
Alencar, a businessman from the Liberal Party which last year issued a call for an FDR-modelled policy, made clear his target is not President Lula, but the benchmark interest ratewhich is back up to 19.25%. No matter how high interest rates are set, they won't stop the inflationary effect of global oil prices, nor the "absurd" increases in electricity and telephone rates granted under privatization contracts signed by the previous government. Alencar said: I am against a monetary policy which aims to cut consumption, in a country where under-consumption is the rule.